FANTASY SPORTS AND GAMBLING LOSSES

[Patrick Michael]

Client received a 1099 from Draftkings with an amount in box 3 (other income).  The amount was equal to his winnings for the year less his entry fees.  Now that several states (including NY, where client lives) consider fantasy sports a form of gambling, can other gambling losses be claimed on schedule A, up to the amount of fantasy winnings.  From what I found during a Google search there seems to be disagreement as to whether or not gambling losses can be deducted in this case.

Just wondering what others think and if anyone else has run into this and how they handled it.

 

[schirallicpa]

that's an interesting topic.  So on the NY return, it is illegal income and then what?  subject to criminal prosecution?  The ban came into effect in November.  When did he win?  would it make a difference on how you report it?  If he won in October then its other income with no offset.  If he won in November we can take other gambling on Schedule A?  

 

[Roberts]

I believe you'd have a deductible expense on Schedule A line 23.

If you received a form declaring it gambling winnings - then you deduct gambling losses.

[Jack from Ohio]

Income reported on 1099-MISC cannot be filed as gambling winnings.  Gambling winnings are reported on W-2G. 

Line 21 and NO DEDUCTION for losses.  Fantasy football is NOT GAMBLING.

[kcjenkins]

I think Jack is right, at least as far as the Feds are concerned.  Just because a few states have re-classified it does not change the feds stand on it.  Maybe a difference on the state return?  

[easytax]

Accounting Today had a decent article on gambling vs: pools ////  interesting read. "Taxing March Madness Pools Is Not a Slam Dunk"  addresses several of the questions/comments here.

                            http://www.accountingtoday.com/news/tax-practice/taxing-march-madness-pools-is-not-a-slam-dunk-77652-1.html?taxpro=1&utm_medium=email&ET=webcpa:e6416530:2544660a:&utm_source=newsletter&utm_campaign=tax%20pro%20today-apr%201%202016&st=email