Legal Question in Tax Law in New York

Re: lottery or gambling loosings

Gambling losses may be deducted on Schedule A, Itemeized Deductions, but only to the extent of gambling winnings; that is, if you win $10,000 and lose $50,000, you may only deduct $10,000. You cannot carry these losses forward to another year.. Also, these deductions are subject to the miscellaneous deduction "phase out" that occurs as your adjusted gross income increases. For example, if your gambling winnings are $300,000 and your losses are an equal $300,000, you would most likely not be allowed to deduct the full $300,000 loss because your adjusted gross income (before deductions) would be too high. If you have any significant gaming winnings, you should consult a professional tax attorney rather than a tax return preparation service.

The Internal Revenue Service provides some guidance on the methods for substantiating gaming losses against gaming winnings. This advice is described more fully at the following website:

http://www.irs.gov/businesses/small/industries/article/0,,id=99599,00.html

Re: lottery or gambling loosings

Yes as to both questions, with the limitation that unless you are recognized as a professional gambler (one whose principal income is derived from gambling), the losses or costs cannot exceed the winnings reported.