Say you’re on a TV show quiz game show like Millionaire. You get to a certain level of winnings and you get to keep it if you leave the show. You choose to gamble and continue. You loose. If you hadn’t gambled you would have kept the higher dollar amount. How does the IRS look at this?
You’re in Vegas. You win a several thousand playing black-jack or on the slots.
You then gamble that money away and have nothing to show for it. You, technically, were in posession of a higher dollar amount at some point in time.
How are these scenarios different than if you had kept the higher earnings and then, say, got robbed shortly afterwards. Or invested in stocks just before a big crash.
At what point in your play do you have to claim the money? Or, how long do you have to posses money before it’s considered earnings?