What is Gambling income and losses?
In short
Gambling winnings are fully included in gross income. Losses are deductible only as an itemized deduction and only up to the amount of winnings.
Key takeaways
- From 2026, the One Big Beautiful Bill Act limits the deduction to 90% of losses, still capped at winnings.
- Winnings can't be netted against losses; both are reported.
- Records of wins and losses are needed to support the deduction.
Example
In 2026, winnings of $10,000 and losses of $10,000: the deduction is limited to $9,000, so $1,000 is taxable.
Where it's tested
REG: Individual Taxation: Gross Income — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Which of the following items is included in a taxpayer's federal gross income?