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Tax Planning/Poker winning/write-off


QUESTION: Hi there,

Last year, I'm a CA resident and I won $7k in a WSOP poker tournament.  As part of my poker league, there is a percentage of the winnings that goes back to all of the members, then i keep the rest.  My question is this: how can I write off that portion of the winnings so that I'm not stuck paying taxes on the entire amount?  Are there forms that I need?

ANSWER: Jeff - I need to know the answer to this question before I can give you the correct advice.  Did you or will you get a W-2G for the winnings?  If so, will it be for the gross amount or the net amount?

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Yes-I got a W-2G for the winnings, less my entry amount for the tournament.

ANSWER: If your W-2G is for the net after your entry amount, then it has already been accounted for and can be fully reported on your 1040.  

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QUESTION: Maybe I wasn't clear.

I'm not talking about the net amount that I took home from the casino. I'm talking about another percentage of my net that was divided amongst other players in my league.

Now I understand.  You are entitled to take an offset for gambling losses but only if you itemize on Schedule A.

You would report the full amount of the W-2G on line 21 of Form 1040 and then take the losses on Line 28 of Schedule A, up to the total amount of winnings report as income.  Be sure you have an accurate diary of winnings and losses.

I hope this helps.

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As an Enrolled Agent, I am fully capable of providing tax advice as it relates to personal and business income taxes. Enrolled Agents are the only Federally licensed tax practitioners and are admitted to practice before all administrative functions of the IRS. My specialty is working with small business owners who file Schedule "C" and helping them to structure their business in such a way as to maximize as many tax advantages as possible. I also enjoy working with individuals who have both routine as well as complex tax situations. I prefer to concentrate on individuals and small business tax planning.


I have a 25 year background in financial services including tax, bookkeeping, insurance, real estate and securities. I was previously the Chief Financial Officer of a local and national franchise organization. I am currently semi-retired, but used to own (in partnership with another EA) an individual and small business financial engineering firm where I work with nearly 2,500 individuals and small business owners in nearly every state and almost every continent, assisting them in all aspects of their tax and financial well-being. I have prepared or reviewed more than 8,000 tax returns in my career.

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