Note: The DearEsq free 'ask a lawyer' site is offered as a free informational service to the public and is not intended as legal advice. Laws vary from state-to-state, and in addition every situation is unique, and relevant facts may not be known. The answer to the question posed below may not apply to in your state or to your situation. For legal advice in your state and your situation you should consult with an attorney in your state who is familiar with the rules and laws in your state.
Gambling can be an expensive hobby, and few people realize that you can sometimes deduct your gambling losses on your tax return, such as this reader who writes: “My wife and I took a trip to Las Vegas this year, and while we did not go over our budget, we did suffer a bit of a loss at the blackjack table in the casino.
Question: I have been told by a friend that it may be possible to deduct my gambling losses – is this true?”
Answer: Yes, it is true that you can deduct losses incurred while gambling from your Federal income taxes. However, there are a couple of very important rules:
1. You can only deduct gambling losses to the extent that you declare gambling earnings; and
2. You must have receipts.