Big Gambling Losses
“A few years back I saw a big player lose $320,000 in 25 minutes. He had just sat down with three full racks of $1000 checks (chips). A rack holds 5 stacks of 20 checks, so each of these racks held $100,000 in checks. I was on my way to a 20 minute break as he was just getting started. Gambling losses are exempt from the 2% AGI threshold that applies to some itemized deductions. Gambling losses are exempt from itemized deduction 3%-cutback. Gambling losses are not an adjustment (add-back) in calculating Alternative Minimum Tax (AMT). Russia's annual gambling losses in 2013 totaled $2.7 billion. Now seen as the largest live casino hub in the world, Macau managed to attract 31.5 million visitors in 2014. If you claim a gambling loss deduction, you will have to prove that you are entitled to it. Casinos send a form W-2G when you win to let the IRS know that they paid you, but it's up to you to establish your losses. The IRS requires you to keep tickets or receipts and a diary of your winnings and losses to substantiate your deduction.
Losses are allowed as an itemized deduction dollar for dollar against the gain. Gambling losses cannot be greater than gambling wins for the tax year. Example: John wins $23,500 during the year playing slots and other casino games. His gambling losses are $37,900.