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Originally Posted by Rupert Pupkin
Yes, that is true. But why wouldn't a person itemize deductions? If a person has net gambling losses for the year but he happened to hit a Pick 4 for $4,000, why wouldn't that persom itemize deductions? He would be a fool not to, unless he likes to pay taxes that he doesn't owe.
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Let's say his itemized deductions (before gambling losses) are 5K less than the standard deduction. He gains nothing by itemizing. He gives up 5K in deductions in order to gain a 4K deduction.
Let's say his itemized deductions (before gambling losses) are 1K less than the standard deduction. Then he gains by itemizing, but the net effect is that he is paying tax on 1K of his winnings. He can write off 4k of losses, but he's already 1K behind by giving up the standard deduction.
--Dunbar