Gambling is a Risky Business at the IRS

Posted on March 13th, by jcsmith in Tax, Tips, Written Articles. Comments Off on Gambling is a Risky Business at the IRS
Gambling is a Risky Business at the IRS

If an occasional trip to the race track is one of your hobbies, you probably know that your winnings are taxable and your losses are deductible only to the extent of your gambling gains. The IRS certainly won’t object to your paying taxes on your race track winnings, but proving your losses is a horse of a different color.

When one horseplayer brought a bag of parimutual tickets to tax court as proof of his losses and asked that their cost be deducted from his winnings, the court declared him a loser because the tickets had footprints on them.

another veteran horseplayer produced a similar collection of losing tickets as proof of his losses. But the court noticed that although the tickets had no heel marks, their  denominations and  serial numbers were so varied that the gambler would have had to buy many tickets for the same race at a dozen different parimutual windows. Needless to say, this gambler lost his tax bet too.

proving a gambling loss for tax purposes requires very convincing evidence. Your best bet might be to take up golf.



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