Tax Court Ruling - Slot player in the business

[Holland Hacker]

Originally Posted by pmacdaddy

Reading it through. It says she was allowed to deduct gambling losses to offset gains. Isn't that the case for anyone with reportable gambling income?

It says she wasn't allowed to deduct the net gambling losses against her regular (trucking) income. So what did she really accomplish?

Is it an issue of being able to deduct expenses associated with her slot play and carryover of losses?

The difference is where you take the deduction on your return.

If it is trade or business it goes on page one, showing 0 in income.

If it is not a trade or business the income goes on page 1 and the deductions go on schedule A "below the line".

This primarily impacts your AGI which could exclude you from certain income limited benefits like the child tax credit, and other credits not to mention would probably put your AGI into the phase out of personal exemptions and itemized deductions.

I think there might also be another classification of a professional gambler, where you would be able to deduct track admission, handicapping materials, etc against your winnings.