How do we net the gambling losses so that they show up on page 1?

[skori]

 If in a session, you won 10,000 but spent 7,000 netting a 3,000 gain, how is the difference entered for the tax return assuming a log is kept for this session?

[Happy-Tax · Accepted solution]

Pub 17, page 196 (2018):

Gambling Losses up to the
Amount of Gambling Winnings
You must report the full amount of your gambling
winnings for the year on Schedule 1 (Form
1040), line 21. You deduct your gambling losses
for the year on Schedule A (Form 1040),
line 16. You can't deduct gambling losses that
are more than your winnings.
You can't reduce your gambling winnings
by your gambling losses and report
the difference. You must report the
full amount of your winnings as income and
claim your losses (up to the amount of winnings)
as an itemized deduction. Therefore,
your records should show your winnings separately
from your losses.

However, from The Taxbook (2018):

Court Case: A taxpayer won $2,000 on a slot machine, but ended up ahead only $1,100 at the end of the day. The taxpayer did not report the winnings on the tax return, and did not itemize deductions to claim the losses. The IRS claimed the taxpayer failed to report gambling winnings of $2,000. However, Tax Court determined the amount of unreported gambling winnings was $1,100. The decision stated that computing wins and losses for each separate wager was too burdensome, and “the fluctuating wins and losses left in play are not accessions to wealth until the taxpayer redeems his or her tokens and can definitively calculate the amount above or below basis (the wager) realized.” (Shollenberger v. Commissioner, T.C. Memo 2009-306)

So who knows?

[IRonMaN]

The losses go on schedule A, they aren't "net".

[skori]

There is a way to net gambling losses.   I just don't know how to in my program

[Just-Lisa-Now-]

Gambling winnings go on the front page, the losses are part of itemized deductions....if your client doesn't itemize, they don't get any benefit from their gambling losses, sorry.

[skori]

Something I learned in my tax class there is a way to net.

Extra Gambling Deductions
Let’s use a live example to illustrate the valuable deductions allowed with sessions and an extra deduction for losses not allowed by sessions.

Session 1  spent 500 won 700      200 gain
session 2  spent 1000.  won 600    400 loss
session 3 spent 300 won 1000    700 gain
session 4  spent 1200 won 300    900 loss

John’s gambling sessions log.
The above sessions log is for a casual gambler who had four sessions throughout 2017. For calculating a session you can use your starting “money in” and netting your “money out” at the end of the session to determine your gain or loss for the session. Inside each session large wins could exist. For example, on February 2nd John may have won a $12,000 jackpot and received a W-2G, but by the end of the session he had only $700 left for a net $200 sessions gain.
John will report $900 of gains on his tax return regardless the gains inside a single session. Losses are not allowed against gains for between sessions.
The $900 gain will end up on Schedule 1 (Form 1040) and will be subject to tax and may affect other deductions and credits on the return. You can also deduct $900 of the additional losses on Schedule A if you itemize! (The $900 sessions gains on Form 1040 can be still be deducted from other losses on Schedule A.) The sessions will always break even (unlikely) or net out as a gain because losses are not allowed between sessions. But unused losses from sessions can be deducted on Schedule A against session gains.

[Just-Lisa-Now-]

maybe you should email your teacher then and ask them.

[garman22]

I would not touch that return. I'd do as Lisa suggests and email the teacher.

[IRonMaN]

https://ttlc.intuit.com/community/Other-tax-discussions/Gambling-Winnings-for-2018/td-p/8402

[garman22]

hmmmmm....thats a tough read for now.

[TaxGuyBill]

In a nutshell, you report the gain/loss based on each "session".  You do not "net" between multiple sessions.

Like most other things, if you have a tax form (such as a W-2G) that shows an amount larger than the actual amount to be reported, you make an offset by a negative entry on Line 21.

[Mike12321]

read:https://wealthyaccountant.com/2018/12/18/deducting-gambling-losses-with-the-new-tax-bill/

I think this article explains the "theory" - see additional posts about how to notate the Notice 2015-21 Safe Harbor.

Your report the winnings, net the "Session losses" to get to the gain, the actual income. Then you can deduct losses up to gains when/if you can itemize.

[Terry53029]

See notice : https://www.irs.gov/irb/2015-12_IRB#NOT-2015-21

Notice 2015–21

Safe Harbor Method for Determining a Wagering Gain or Loss from Slot Machine Play

[heathdurbin]

Great answer, and this part is what he is asking about...

"However, Tax Court determined the amount of unreported gambling winnings was $1,100. The decision stated that computing wins and losses for each separate wager was too burdensome, and “the fluctuating wins and losses left in play are not accessions to wealth until the taxpayer redeems his or her tokens and can definitively calculate the amount above or below basis (the wager) realized.” (Shollenberger v. Commissioner, T.C. Memo 2009-306)"

So in one session, I won $2,000 and got a W-2g, how in turbo tax (or other Intuit software) do I document that even though I had a $2,000 W-2g, I'm only table able on the net of $1,100? 

[heathdurbin]

Not per Tax court rulings, that are binding. 

[TaxGuyBill]

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@heathdurbin wrote:

 how in turbo tax (or other Intuit software) do I document that even though I had a $2,000 W-2g, I'm only table able on the net of $1,100? 

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You should ask that on the TurboTax forum, not here.

[heathdurbin]

Agreed. I'm trying to get Intuit to add it into all of their software. 

[TaxGuyBill]

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@heathdurbin wrote:

Agreed. I'm trying to get Intuit to add it into all of their software. 

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You must be new to Intuit software.  They often don't update it for required items, much less helpful/desired items.

[Accountant-Man]

Enter a negative $900 as Other Income. 

[qbteachmt]

"I'm trying to get Intuit to add it into all of their software."

That's not what you asked here. You asked How To: "how in turbo tax (or other Intuit software) do I document that even though I had a $2,000 W-2g, I'm only table able on the net of $1,100?"

Since you are in the ProSeries Community, issues for enhancements would be posted in the Ideas Exchange, to be set a status by Intuit, then voted on, then implemented or not. Here:

https://proconnect.intuit.com/community/proseries-tax-idea-exchange/idb-p/603

[Diane Stephens]

That is almost worth purchasing Turbo Tax for my client,  Thanks