Gambling losses on CA tax return

[singh]

Can I deduct Gambling losses (to the extent of winning) on California tax return? If I can then where do I show the losses on 540 Form? My client won $8000.00 shown on W2G and he wants to claim that loss 

on his CA tax return.

Thank you in advance.

[Just-Lisa-Now-]

Gambling losses are part of Misc Itemize Deductions, Sch A, they should automatically flow to the CA return.

[singh]

Thank you, Lisa, but I cannot locate where on 540 Form the losses are shown. On CA 540 Adjustments

under Part 1 Section B should I manually enter the loss under ' Subtractions'  Line 8b, or should I go down to SECTION C- Adjustments to Income and enter it on Z 'Other adjustments' Under 'Additions.'

I would really appreciate if you could look into it.

[abctax55]

 "...if you could look into it."

Lisa is a fellow software user, a volunteer.

CA's reconciliation of itemized deductions isn't on Form 540.  It's on California's  six page Sch CA, Part II, page 5-6.  Specifically, line 16.

Gambling losses are NOT an adjustment to income, they are itemized deductions.  Are you sure your client has enough in dedutions to itemize?

[Just-Lisa-Now- · Accepted solution]

Use the button on Line 18 of form 540 to see whats included in the itemized deductions for CA, thats where you'll find it, included on Line 18. 

The CA return should also have a Sch A included with the 540, you could look at that as well.

[George4Tacks]

@singh I think there was a question,  but no ? mark. No do not manually make an adjustment. 

When all else fails read the instructions.

Limitation on wagering losses – Under federal law, all deductions for expenses incurred in carrying out wagering transactions, and not just gambling losses, are limited to the extent of gambling winnings. California does not conform. Figure the difference between the amounts allowed using federal law and California law. Enter the difference on line 3, column B.

[singh]

Thank you, Lisa, soooo much for your help. With your detailed explanation I was able to locate the gambling loss on CA 540.

[singh]

Thank you abctax 55 for your help. I really appreciate your help. 

[singh]

Thank you, George, for your answer to my question. It helped me solve my problem.