A Toronto man trying to write off casino and racetrack losses against his income tax bill has gambled and lost at Canada's Federal Court of Appeal.
- Can You Still Write Off Gambling Losses
- Can I Write Off Casino Losses
- Can I Write Off Gambling Losses Against Winnings
You Can Deduct Gambling Losses (If You Itemize) Although you must list all your winnings on your tax return, you don't necessarily have to pay tax on the full amount. You are allowed to list your annual gambling losses as a miscellaneous itemized deduction on Schedule A of your tax return. Gambling losses may be deducted as an itemized deduction. Losses cannot exceed winnings. Losses must be documented. Winnings must include all winnings not just those shown on a W-2G. Good newsYou can! However, the bad news is that gambling losses are only deductible up to the amount of your winnings. Gambling Loss Limitation. You can't deduct more in gambling losses than you have in gambling winnings for the year. For example, suppose you reported $13,000 in gambling winnings on Line 21 of.
Giuseppe Tarascio claims that gambling is how he earns the bulk of his income. He filed tax returns for several years, claiming both his wins and losses.
By day, Tarascio is a technician with Bell Canada. But on evenings and weekends, he responds to what he claims is his true calling: horses, slot machines, casino games and lotteries.
Try to Find A Top Pay Back Machine Pay Back signifies the percent of each dollar shot in By the slot pays back out. The other side of the revival portion reflects The House edge. For example, if a machine features a 90% revival, the pay Back is 90 cents of each dollar taken in.
He claims to have won tens of thousands of dollars. For years he claimed those winnings as income, but he also deducted his losses and expenses.
Online casino phone deposit bonus. In his income tax returns for 2002 and 2003, he deducted from his gambling winnings his losses and associated expenses: $40,933 in 2002 and $56,000 in 2003.
But Tarascio's luck ran out when the Canada Revenue Agency (CRA) stepped in and disallowed those deductions.
Tarascio objected and went to tax court. He presented his books and records, but lost there too.
No 'systematic method,' court rules
Hoping his courtroom losing streak would end, Tarascio pushed his luck further, taking his case to the Court of Appeal.
He claimed that his degree in mathematics — coupled with his experience in probability theory — gave him the expertise to register his gambling as a business.
But the court turned him down, saying Tarascio had no 'systematic method' for gambling and had spent no time practising his skills. He was also required to pay court costs of $1,000.
It didn't help that Tarascio admitted that win or lose, it was really the thrill that drove him to the tables.
Colin Campbell, who teaches tax law at the University of Western Ontario, said the test of whether or not gambling losses are a legitimate writeoff depends on whether it's a personal or commercial activity.
'That's the dividing line,' said Campbell. 'And in the case of gambling, the courts have generally found that gambling is predominately a personal activity.'
Tarascio didn't want to talk about the decision when contacted by CBC News.
Asked if he planned to appeal to the Supreme Court, he said no. That would require a lawyer, but Tarascio said he can't afford one.
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LSU Fan
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quote:
Im not sure where in the Carribean you would pay 1000.25 per person to fly to. I did print out the booking data from delta.
Depends on the fare class of the ticket.. There are more than you think
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Can You Still Write Off Gambling Losses
LSU Fan
Baton Rouge, LA
Member since Dec 2004
49125 posts
USA Fan
The Batcave
Member since Mar 2011
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Example:
You win $5,000 in 2012 and lose $7,500. You can only deduct $5,000 of the losses.
You win $5,0000 in 2012 and lose $4,000. You can deduct the whole $4,000 since it is less than your winnings. You would be responsible for taxes on the remaining $1,000 of you winnings.
LSU Fan
Baton Rouge, LA
Member since Dec 2004
49125 posts
If I had 25k in gambling losses and won a 25k MSRP car in a drawing vs 25k in gambling losses and won a 25k MSRP car at the casino slot.
Seems to be that they are not treated equally. In one case I would get to duduct but in the other case I would be stuck with the 25k income. At which I could claim FMV of the car as being around 19k instead of 25k.
Atlanta Falcons Fan
Houston
Member since Dec 2007
26665 posts
Online
quote:
What is crazy is that they valued them at 4k but they dont bother take into account that we literally had 2 days only to book
Interesting way to reduce losses by an airlines..
USA Fan
The Batcave
Member since Mar 2011
10666 posts
quote:
If I had 25k in gambling losses and won a 25k MSRP car in a drawing vs 25k in gambling losses and won a 25k MSRP car at the casino slot.
I see what you're saying and I'm not exactly sure what the IRS uses as the definition of 'gambling.' To me, it would seem that if you paid for a chance to win something, then that would be gambling. There is also the issue of people doing those sort of raffles as a charity (like St. Jude Dream Home) and then writing off the cost of the ticket as a donation. I really don't know all the ends and outs but I'm sure Poodlebrain could fill in the gaps.
Prizes and awards.
If you win a prize in a lucky number drawing, television or radio quiz program, beauty contest, or other event, you must include it in your income. For example, if you win a $50 prize in a photography contest, you must report this income on Form 1040, line 21. If you refuse to accept a prize, do not include its value in your income. Prizes and awards in goods or services must be included in your income at their fair
market value.
I think the bolded part gives you your answer - the instructions are telling you to report it on a different line than where you would report gambling losses. So I don't think you can offset.
LSU Fan
Baton Rouge, LA
Member since Dec 2004
49125 posts
I also had to pay the international taxes to fly to Nassau. That is normally included in the ticket price. So Im guessing I could reduce the winnings by the 95 dollars per ticket I incured there as well since I have that documented. Likely I will just keep my printout of the real cost and use that to determine FMV.
Navy Fan
perfectanschlagen
Member since May 2008
9961 posts
You really should get contemporaneous documentation, however, as claiming something less than what is shown on the 1099 just might invite an audit. However, if you don't want to risk an audit (because you may have other 'iffy' items on your return), there is a method by which you can call the IRS and file a Form 4598 to get the prize company to issue a corrected 1099.
As far as deducting losses, you're out of luck. The IRS takes the position that sweepstakes type winning (where you don't really have to do anything but enter -- i.e., you're not putting up any of your money to get a chance to 'win') are not considered 'gambling winnings' and therefore cannot be offset by gambling losses.
LSU Fan
Baton Rouge, LA
Member since Dec 2004
49125 posts
Can I Write Off Casino Losses
Can I Write Off Gambling Losses Against Winnings
Navy Fan
perfectanschlagen
Member since May 2008
9961 posts
Again, your shit-out-of-luck with the gambling losses.
He claims to have won tens of thousands of dollars. For years he claimed those winnings as income, but he also deducted his losses and expenses.
Online casino phone deposit bonus. In his income tax returns for 2002 and 2003, he deducted from his gambling winnings his losses and associated expenses: $40,933 in 2002 and $56,000 in 2003.
But Tarascio's luck ran out when the Canada Revenue Agency (CRA) stepped in and disallowed those deductions.
Tarascio objected and went to tax court. He presented his books and records, but lost there too.
No 'systematic method,' court rules
Hoping his courtroom losing streak would end, Tarascio pushed his luck further, taking his case to the Court of Appeal.
He claimed that his degree in mathematics — coupled with his experience in probability theory — gave him the expertise to register his gambling as a business.
But the court turned him down, saying Tarascio had no 'systematic method' for gambling and had spent no time practising his skills. He was also required to pay court costs of $1,000.
It didn't help that Tarascio admitted that win or lose, it was really the thrill that drove him to the tables.
Colin Campbell, who teaches tax law at the University of Western Ontario, said the test of whether or not gambling losses are a legitimate writeoff depends on whether it's a personal or commercial activity.
'That's the dividing line,' said Campbell. 'And in the case of gambling, the courts have generally found that gambling is predominately a personal activity.'
Tarascio didn't want to talk about the decision when contacted by CBC News.
Asked if he planned to appeal to the Supreme Court, he said no. That would require a lawyer, but Tarascio said he can't afford one.
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LSU Fan
Baton Rouge, LA
Member since Dec 2004
49125 posts
Chicago Cubs Fan
Coastal Bar
Member since May 2006
95109 posts
LSU Fan
Baton Rouge, LA
Member since Dec 2004
49125 posts
LSU Fan
Member since Dec 2007
46547 posts
Online
quote:
Im not sure where in the Carribean you would pay 1000.25 per person to fly to. I did print out the booking data from delta.
Depends on the fare class of the ticket.. There are more than you think
LINK
Can You Still Write Off Gambling Losses
LSU Fan
Baton Rouge, LA
Member since Dec 2004
49125 posts
USA Fan
The Batcave
Member since Mar 2011
10666 posts
Example:
You win $5,000 in 2012 and lose $7,500. You can only deduct $5,000 of the losses.
You win $5,0000 in 2012 and lose $4,000. You can deduct the whole $4,000 since it is less than your winnings. You would be responsible for taxes on the remaining $1,000 of you winnings.
LSU Fan
Baton Rouge, LA
Member since Dec 2004
49125 posts
If I had 25k in gambling losses and won a 25k MSRP car in a drawing vs 25k in gambling losses and won a 25k MSRP car at the casino slot.
Seems to be that they are not treated equally. In one case I would get to duduct but in the other case I would be stuck with the 25k income. At which I could claim FMV of the car as being around 19k instead of 25k.
Atlanta Falcons Fan
Houston
Member since Dec 2007
26665 posts
Online
quote:
What is crazy is that they valued them at 4k but they dont bother take into account that we literally had 2 days only to book
Interesting way to reduce losses by an airlines..
USA Fan
The Batcave
Member since Mar 2011
10666 posts
quote:
If I had 25k in gambling losses and won a 25k MSRP car in a drawing vs 25k in gambling losses and won a 25k MSRP car at the casino slot.
I see what you're saying and I'm not exactly sure what the IRS uses as the definition of 'gambling.' To me, it would seem that if you paid for a chance to win something, then that would be gambling. There is also the issue of people doing those sort of raffles as a charity (like St. Jude Dream Home) and then writing off the cost of the ticket as a donation. I really don't know all the ends and outs but I'm sure Poodlebrain could fill in the gaps.
Prizes and awards.
If you win a prize in a lucky number drawing, television or radio quiz program, beauty contest, or other event, you must include it in your income. For example, if you win a $50 prize in a photography contest, you must report this income on Form 1040, line 21. If you refuse to accept a prize, do not include its value in your income. Prizes and awards in goods or services must be included in your income at their fair
market value.
I think the bolded part gives you your answer - the instructions are telling you to report it on a different line than where you would report gambling losses. So I don't think you can offset.
LSU Fan
Baton Rouge, LA
Member since Dec 2004
49125 posts
I also had to pay the international taxes to fly to Nassau. That is normally included in the ticket price. So Im guessing I could reduce the winnings by the 95 dollars per ticket I incured there as well since I have that documented. Likely I will just keep my printout of the real cost and use that to determine FMV.
Navy Fan
perfectanschlagen
Member since May 2008
9961 posts
You really should get contemporaneous documentation, however, as claiming something less than what is shown on the 1099 just might invite an audit. However, if you don't want to risk an audit (because you may have other 'iffy' items on your return), there is a method by which you can call the IRS and file a Form 4598 to get the prize company to issue a corrected 1099.
As far as deducting losses, you're out of luck. The IRS takes the position that sweepstakes type winning (where you don't really have to do anything but enter -- i.e., you're not putting up any of your money to get a chance to 'win') are not considered 'gambling winnings' and therefore cannot be offset by gambling losses.
LSU Fan
Baton Rouge, LA
Member since Dec 2004
49125 posts
Can I Write Off Casino Losses
Can I Write Off Gambling Losses Against Winnings
Navy Fan
perfectanschlagen
Member since May 2008
9961 posts
Again, your shit-out-of-luck with the gambling losses.
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