![]() Your gambling losses are then reported as an itemized deduction on Line 16 of Schedule A, but this deduction is limited by the amount of winnings that has been reported as income, which means, despite having $20,000 in losses, the above individual can only report $10,000 of losses. ![]() This $10,000 of income is reported on Schedule 2 line 8(b), which then carries to Form 1040 line 8. At the federal level, you include all of your gambling winnings in your income. Let’s take the example of an individual that won $10,000 on specific sports bets and also lost $20,000 on other specific sports bets in the same year. ![]() Let’s walk through the default treatment of gambling income. Federal Taxation of Gambling Income and Losses
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