That's an important clarification, Joel. Thanks!
This gets into the stickiness of "session reporting". misscraps has shared extensively the problems she encountered when, in employing session reporting, her return showed a smaller value for "gross winnings" than was reported in w-2g's. In her case, the IRS wouldn't buy onto it and required an amended return.
Without delving into this in detail, a netting of session losses against w-2g reported wins and reporting a reduced amount is a red flag for the IRS and perhaps best avoided. (On the other hand, if other session wins during the year are sufficient to offset the w-2g session losses, so that return reported gross winnings equals or exceeds the w-2g total, then not only is this reporting not likely to be problematic, but I see such reporting as being more consistent with general IRS guidance.)
---In vpFREE@yahoogroups.com, <joejavinn@...> wrote :
Harry, you make the exact case that I did in my original post: you can only
claim a loss of actual cash played/put into the machine. Taking out more
than you put in, however that happens, is a win in the amount of the
difference. However, in saying the IRS would probably not have a problem
with his process, you overlook the part where Jim suggests that he might
get a W2G, play part of the hand pay back, and report what is left as a
win. It has always been my understanding that claiming less than the total
of all W2G wins as your gambling win on you income tax is begging to be
audited, and clearly not a method the IRS accepts. I realize that Jim was
posing a hypothetical which he doesn't think would happen to him because of
his choice of games. I am certain that you and I do not want to ever
suggest a process that would get another person on this board into tax hot
water, so I thought clarification was in order.
Joel P.
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[Non-text portions of this message have been removed]
Posted by: harry.porter@verizon.net
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