tax research Accounting Software
Parker Pro Library
online tax research Parker Tax Pro Library tax research Like us on Facebook Follow us on Twitter View our profile on LinkedIn Find us on Pinterest
federal tax research
CPA Client Letter Samples
Accounting and tax
Tax Research Articles Tax Research Parker's Tax Research Articles Accounting Research CPA Client Letters Tax Research Software Client Testimonials Tax Research Software tax research


Tax Research Parker Tax Pro Library

Also see: IRS Issues Proposed Rules on Winnings from Electronic Slot Machines.

Tax Software

CPA Sample Client Letter: Reporting Gambling Winnings and Losses.

(Parker Tax Publishing March 23, 2015)

 

Dear [client name]:

I understand you have engaged in numerous gambling transactions and are concerned with the tax reporting of your gains and losses.

Assuming you are a recreational gambler (i.e., you are not in the trade or business of being a professional gambler), you are required to report the full amount of your gambling winnings (with no reduction for gambling losses) for the year as income on Form 1040, and then deduct your gambling losses (up to the amount reported as gambling winnings) for the year separately on Schedule A, Itemized Deductions, as a miscellaneous itemized deduction. Such gambling losses are not subject to the 2 percent floor. If you are filing a joint return for the tax year, you and your spouse's combined gambling losses are deductible to the extent of your combined winnings. Gambling losses in excess of winnings are not deductible.

On the other hand, if you qualify as a professional gambler, you can deduct your gambling losses up to the amount reported as gambling winnings as an above-the-line deduction in arriving at adjusted gross income, rather than as an itemized deduction. This limitation, however, does not limit deductions for expenses incurred to engage in the trade or business of gambling. A professional gambler's business expenses are not "losses from wagering transactions" subject to the deduction limitation. Thus, expenses such as telephone and internet charges, automobile expenses, ATM fees, etc. could be deductible business expenses for a professional gambler.

In order to deduct your losses and business expenses, you must keep an accurate diary or similar record of your winnings, losses and expenses. You should maintain a diary which should contain at least the following:

(1) the date and type of the specific wager or wagering activity;

(2) the name and address or location of the gambling establishment;

(3) the names of other people present with you at the gambling establishment; and

(4) the amounts won or lost.

You should also have other documentation in addition to a diary. You can generally prove your winnings and losses through Form W-2G, Certain Gambling Winnings; Form 5754, Statement by Person(s) Receiving Gambling Winnings, wagering tickets, canceled checks, substitute checks, credit records, bank withdrawals, and statements of actual winnings or payment slips provided to you by the gambling establishment.

For specific wagering transactions, you can use the following items to support your winnings and losses:

(1) Keno: Copies of the keno tickets you purchased that were validated by the gambling establishment, copies of your casino credit records, and copies of your casino check-cashing records.

(2) Slot machines: A record of the machine number and all winnings by date and time the machine was played.

(3) Table games (twenty-one (blackjack), craps, poker, baccarat, roulette, wheel of fortune, etc.): The number of the table at which you were playing and casino credit card data indicating whether the credit was issued in the pit or at the cashier's cage.

(4) Bingo: A record of the number of games played, cost of tickets purchased, and amounts collected on winning tickets. Supplemental records include any receipts from the casino, parlor, etc.

(5) Racing (horse, harness, dog, etc.): A record of the races, amounts of wagers, amounts collected on winning tickets, and amounts lost on losing tickets. Supplemental records include unredeemed tickets and payment records from the racetrack.

(6) Lotteries: A record of ticket purchases, dates, winnings, and losses. Supplemental records include unredeemed tickets, payment slips, and winnings statements.

Please call me at your earliest convenience if you need more information or would like to discuss your particular situation.

Sincerely,

[Your Name, Your Firm]


Disclaimer: This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer. The information contained herein is general in nature and based on authorities that are subject to change. Parker Tax Publishing guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. Parker Tax Publishing assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein.

Parker Tax Pro Library - An Affordable Professional Tax Research Solution. www.parkertaxpublishing.com


Professional tax research

We hope you find our professional tax research articles comprehensive and informative. Parker Tax Pro Library gives you unlimited online access all of our past Biweekly Tax Bulletins, 22 volumes of expert analysis, 250 Client Letters, Bob Jennings Practice Aids, time saving election statements and our comprehensive, fully updated primary source library.

Parker Tax Research

Try Our Easy, Powerful Search Engine

A Professional Tax Research Solution that gives you instant access to 22 volumes of expert analysis and 185,000 authoritative source documents. But having access won’t help if you can’t quickly and easily find the materials that answer your questions. That’s where Parker’s search engine – and it’s uncanny knack for finding the right documents – comes into play

Things that take half a dozen steps in other products take two steps in ours. Search results come up instantly and browsing them is a cinch. So is linking from Parker’s analysis to practice aids and cited primary source documents. Parker’s powerful, user-friendly search engine ensures that you quickly find what you need every time you visit Our Tax Research Library.

Parker Tax Research Library

Dear Tax Professional,

My name is James Levey, and a few years back I founded a company named Kleinrock Publishing. I started Kleinrock out of frustration with the prohibitively high prices and difficult search engines of BNA, CCH, and RIA tax research products ... kind of reminiscent of the situation practitioners face today.

Now that Kleinrock has disappeared into CCH, prices are soaring again and ease-of-use has fallen by the wayside. The needs of smaller firms and sole practitioners are simply not being met.

To address the problem, I’ve partnered with a group of highly talented tax writers to create Parker Tax Publishing ... a company dedicated to the idea that comprehensive, authoritative tax information service can be both easy-to-use and highly affordable.

Our product, the Parker Tax Pro Library, is breathtaking in its scope. Check out the contents listing to the left to get a sense of all the valuable material you'll have access to when you subscribe.

Or better yet, take a minute to sign yourself up for a free trial, so you can experience first-hand just how easy it is to get results with the Pro Library!

Sincerely,

James Levey

Parker Tax Pro Library - An Affordable Professional Tax Research Solution. www.parkertaxpublishing.com

    ®2012-2016 Parker Tax Publishing. Use of content subject to Website Terms and Conditions.

IRS Codes and Regs
Tax Court Cases IRS guidance