After harping so much about gambling losses, I am quoting some more from the IRS Pub 17. Gambling losses that are more than your winnings cannot be deducted on Sch A or anywhere else for your hobby that pays. A hobby is not a business because it is not carried on to make a profit. The IRS states that hobby expenses can generally be deducted only up to the amount of hobby income. To take any losses you may have incurred during the tax year, you have to have records to prove your gambling activities.
The IRS says you must keep an accurate diary or similar record of your losses and winnings. Your diary should contain at least the following information:
date and type of you gambling activity
name and place where you bought tickets
amount you won or lost. Winnings should be shown separately from losses.
Publication 529 has more information.
A lottery record might look like this:
Your name
Your Social Security #
Tax Year
Lottery
Date: Name of lottery: Tickets purchased: Amount won: Amount lost:
DO WHAT YOU CAN, WITH WHAT YOU HAVE, WHERE YOU ARE. (Theodore Roosevelt 1858-1919)
Tags: hobby income, losses, lottery, winnings
