hi

im sure this has been answered dozens of times but i searched and couldnt find anything recently.

so received a 1099-misc for a staking arrangement. want to deduct documented losses against that - but the tax program i have doesnt recognize the 1099-misc as gambling expenses. i can override this but

a. assume this is ok to do since it is all gambling wins/losses
b. should i provide documentation with the filing on the losses to counter the 1099-misc - i know this is subjective but advice pls

thanks

You cannot net losses against wins unless you are filing as a pro, using Schedule C. If you use Schedule C, add your 1099-misc to your business income (your software program should allow that) and take your losses (up to a max of your total wins) as a misc business expense on the same form.

If you file as an amateur, you can deduct your losses (up to a max of your total wins) on your Schedule A Itemized Deductions. Your 1099-misc income would go on your Form 1040 as miscellaneous income (i.e., gambling income).

thanks did that but the interesting thing is the tax sw doesnt recognize a 1099-misc as a potential for gambling income i guess i just need to override it and ansqwer quetions as they come

It is a bit unusual, but an override is fine. You might want to attach an explanation to your return to head off any questions about it the IRS might have.

Is this is still true for 2019?

If you file as an amateur, you can deduct your losses (up to a max of your total wins) on your Schedule A Itemized Deductions. Your 1099-misc income would go on your Form 1040 as miscellaneous income (i.e., gambling income).

Yes.

The instructions for Schedule A for the 2018 tax year state:
"Gambling losses (gambling losses include, but aren't limited to, the cost of non-winning bingo, lottery, and raffle tickets), but only to the extent of gambling winnings reported on Schedule 1 (Form 1040), line 21."

Should be the same for 2019 tax year.

What if you don't do itemized deductions and just take standard deduction ( 12000$), can you still deduct losses?

No.

My question is quite similar to the OP but I may have a problem with the 1099-MISC that I received. I backed (5%) my friend in a couple of tournaments, one he did not cash and the second he had a small 6-figure score. As we had agreed in advance, I sent him a W-9, and he sent me a 1099-MISC. I think there may be a couple of problems with the 1099-MISC:

1-The amount is reported in Box 7, Nonemployee Compensation, but I think this should instead be reported in Box 3, Other Income. Is this correct?

2-The amount that is reported is the gross amount of the winnings, rather than the net. I think the net winnings is the appropriate amount, right? Should the amount of the buy in for the tournament that he didn’t cash also be deducted from this total?

Additional info about my situation: I’m an amateur (most of my income comes from my real job and is reported on a W-2) using TurboTax, I itemize my deductions. TurboTax has this amount under Business Income and there is an associated Schedule C with it. I believe my most favorable situation is to have this as Gambling Winnings, in which case I could also deduct some of my own tournament buy ins from the net wins. If I’m right about the Box 7 vs Box 3 situation then I believe this problem will be easily resolvable with TurboTax.

Thanks in advance for any “entertainment value” and/or advice you can provide.