Wednesday, February 21, 2007

Gambling income includes, but is not limited to, winnings from lotteries,
raffles, horse and dog races and casinos, as well as the fair market value
of prizes such as cars, houses, trips or other noncash prizes. Depending on
the type and amount of your winnings, the payer might provide you with a
Form W-2G and may have withheld federal income taxes from the payment. Here
are some general guidelines on gambling income and losses: Reporting
winnings: The full amount of your gambling winnings for the year must be
reported on line 21, Form 1040. You may not use Form 1040A or 1040EZ.
Deducting losses: If you itemize deductions, you can deduct your gambling
losses for the year on line 27, Schedule A (Form 1040). You cannot deduct
gambling losses that are more than your winnings. It is important to keep an
accurate diary or similar record of your gambling winnings and losses. To
deduct your losses, you must be able to provide receipts, tickets,
statements or other records that show the amount of both your winnings and
losses.