If gambling is your main source of income then you can write off the gambling losses that you have incurred. I guess what they will have to determine is if there is an expectation of profit from your gambling. If you claim gambling losses for 5 years and have never had any winning years, they might not allow the gambling losses. Some of the factors they use to determine if your gambling is a business:
A) Time spent gambling.If you spend most of your nights gambling then you obvious have considerable time spent.
B) Degree of record keeping. If you keep detailed day to day records of your gambling then that supports that your gambling is a business.
C) How much you have invested in it. If you are only gambling with a minimal bankroll and you have a full time job on the side, they may determine that gambling is not your main source of income and therefore you will not be allowed to deduct your gambling losses.
I am not really sure how the states treats gambling winnings and losses but I know that in Canada gambling is not taxable unless you are doing it as your means of living.Then the winnings are taxable.You can't claim losses every year though because then you would not have a reasonable expectation of profit.
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