# Tax question **URL:** \ **Category:** Factual Questions\ **Created:** [August 6, 2015, 5:21pm UTC](https://boards.straightdope.com/t/tax-question/727174 "2015-08-06T17:21:09Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![copperwindow](https://avatars.discourse-cdn.com/v4/letter/c/4af34b/32.png) [@copperwindow](https://boards.straightdope.com/u/copperwindow)\ **Post date:** [August 6, 2015, 5:21pm UTC](https://boards.straightdope.com/t/tax-question/727174/1 "2015-08-06T17:21:09Z")
I know if I go into a casino and win a lot of money, they have to tell the IRS and I have to pay taxes on my winnings. Does this mean if I go to a casino and lose money, I can call it a loss on my taxes? ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [August 6, 2015, 5:23pm UTC](https://boards.straightdope.com/t/tax-question/727174/2 "2015-08-06T17:23:48Z")
You can deduct gambling losses. > **[Topic No. 419, Gambling Income and Losses | Internal Revenue Service](https://www.irs.gov/taxtopics/tc419)** > > The following rules apply to casual gamblers who aren't in the trade or business of gambling. Gambling winnings are fully taxable and you must report the income on your tax return. Gambling income includes but isn't limited to winnings from... ---
**Author:** ![MedellinMike](https://avatars.discourse-cdn.com/v4/letter/m/c6cbf5/32.png) [@MedellinMike](https://boards.straightdope.com/u/MedellinMike)\ **Post date:** [August 6, 2015, 5:28pm UTC](https://boards.straightdope.com/t/tax-question/727174/3 "2015-08-06T17:28:59Z")
You can generally only claim gambling losses up to the amount of any winnings. [http://www.irs.gov/uac/Newsroom/Five-Important-Tips-on-Gambling-Income-and-Losses-1](http://www.irs.gov/uac/Newsroom/Five-Important-Tips-on-Gambling-Income-and-Losses-1) Edit-and you should probably be keeping records if you’re claiming those losses. ---
**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\ **Post date:** [August 6, 2015, 5:37pm UTC](https://boards.straightdope.com/t/tax-question/727174/4 "2015-08-06T17:37:37Z")
> [@Ravenman](#): > > You can deduct gambling losses. > > [Topic no. 419, Gambling income and losses | Internal Revenue Service](http://www.irs.gov/taxtopics/tc419.html) Only against your winnings. If you just show up and lose a bunch of money, you don’t get a deduction. ---
**Author:** ![copperwindow](https://avatars.discourse-cdn.com/v4/letter/c/4af34b/32.png) [@copperwindow](https://boards.straightdope.com/u/copperwindow)\ **Post date:** [August 6, 2015, 5:43pm UTC](https://boards.straightdope.com/t/tax-question/727174/5 "2015-08-06T17:43:45Z")
Okay, if I lose a lot of money gambling, can I count it off of winning in the stock market? ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [August 6, 2015, 6:09pm UTC](https://boards.straightdope.com/t/tax-question/727174/6 "2015-08-06T18:09:16Z")
“Winning in the stock market?” 😕 Not sure if you’re joking or if you think that buying securities is actually a form of gambling. ---
**Author:** ![copperwindow](https://avatars.discourse-cdn.com/v4/letter/c/4af34b/32.png) [@copperwindow](https://boards.straightdope.com/u/copperwindow)\ **Post date:** [August 6, 2015, 6:13pm UTC](https://boards.straightdope.com/t/tax-question/727174/7 "2015-08-06T18:13:05Z")
In a way it most certainly is, but that doesn’t answer my question. ---
**Author:** ![copperwindow](https://avatars.discourse-cdn.com/v4/letter/c/4af34b/32.png) [@copperwindow](https://boards.straightdope.com/u/copperwindow)\ **Post date:** [August 6, 2015, 6:24pm UTC](https://boards.straightdope.com/t/tax-question/727174/8 "2015-08-06T18:24:24Z")
I guess “gains” might be a better word to use. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [August 6, 2015, 6:24pm UTC](https://boards.straightdope.com/t/tax-question/727174/9 "2015-08-06T18:24:50Z")
> [@copperwindow](#): > > In a way it most certainly is, but that doesn’t answer my question. _In a way_, yes. But no, you can’t write off Capital gains vs Gambling losses. ---
**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\ **Post date:** [August 6, 2015, 6:25pm UTC](https://boards.straightdope.com/t/tax-question/727174/10 "2015-08-06T18:25:51Z")
You can not deduct gambling losses against capital gains. You can only deduct capital losses against capital gains. Capital gains and losses involve a lot more than just stocks, though. ---
**Author:** ![bob\_2](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bob_2/32/3341_2.png) [@bob\_2](https://boards.straightdope.com/u/bob_2)\ **Post date:** [August 6, 2015, 6:33pm UTC](https://boards.straightdope.com/t/tax-question/727174/11 "2015-08-06T18:33:24Z")
I doubt that you could offset your casino win against the loss in value of your house either:) ---
**Author:** ![copperwindow](https://avatars.discourse-cdn.com/v4/letter/c/4af34b/32.png) [@copperwindow](https://boards.straightdope.com/u/copperwindow)\ **Post date:** [August 6, 2015, 6:47pm UTC](https://boards.straightdope.com/t/tax-question/727174/12 "2015-08-06T18:47:32Z")
> [@bob\_2](#): > > I doubt that you could offset your casino win against the loss in value of your house either:) That was actually my next question. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [August 6, 2015, 6:49pm UTC](https://boards.straightdope.com/t/tax-question/727174/13 "2015-08-06T18:49:20Z")
> [@copperwindow](#): > > That was actually my next question. No. ---
**Author:** ![dracoi](https://avatars.discourse-cdn.com/v4/letter/d/90db22/32.png) [@dracoi](https://boards.straightdope.com/u/dracoi)\ **Post date:** [August 6, 2015, 6:52pm UTC](https://boards.straightdope.com/t/tax-question/727174/14 "2015-08-06T18:52:39Z")
Even if you argue that stocks are a form of gambling, the bottom line is that it’s a different type of income. Gambling winnings are ordinary income and losses are personal/other itemized deductions. Capital gains/losses are both a sub-type of investment income. I won’t attempt to outline how the various types of income interact with each other, but it’s very common to see rules that group income types to interacting only with similar types. Passive losses deducted only from passive income. Capital losses deducted only from capital gain. Investment losses limited to investment income. In my education about tax law, finally gaining a comprehensive understanding of this hierarchy of income types was a sort of Eureka moment that turned a collection of seemingly arbitrary rules into something that was (almost) logical and predictable. ---
**Author:** ![SenorBeef](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/senorbeef/32/2220_2.png) [@SenorBeef](https://boards.straightdope.com/u/SenorBeef)\ **Post date:** [August 6, 2015, 7:00pm UTC](https://boards.straightdope.com/t/tax-question/727174/15 "2015-08-06T19:00:18Z")
People misunderstand what “you can deduct gambling losses” means. It just means that you get taxed on the net result of your gambling. Let’s say you’re playing blackjack. You bet $50. You play 21 hands. You lose 10 hands, and win 11. So you lost $500, but won $550, for a net result of +$50. If only your winnings counted, and you couldn’t deduct your losses against them, you’d be taxed on the $550 even though it’s only a net gain of $50. So of course you deduct your losses - 550 - 500 = 50, and that’s your taxable income. At least that’s my understanding. People who misuse this idea seem to think that if you go out and lose a lot of money, you don’t owe any taxes anymore on your income. ---
**Author:** ![copperwindow](https://avatars.discourse-cdn.com/v4/letter/c/4af34b/32.png) [@copperwindow](https://boards.straightdope.com/u/copperwindow)\ **Post date:** [August 6, 2015, 7:13pm UTC](https://boards.straightdope.com/t/tax-question/727174/16 "2015-08-06T19:13:23Z")
Not to nitpick, but I pay income tax on my stocks, not capital gains. ---
**Author:** ![USCDiver](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/uscdiver/32/354_2.png) [@USCDiver](https://boards.straightdope.com/u/USCDiver)\ **Post date:** [August 6, 2015, 7:17pm UTC](https://boards.straightdope.com/t/tax-question/727174/17 "2015-08-06T19:17:22Z")
> [@copperwindow](#): > > Not to nitpick, but I pay income tax on my stocks, not capital gains. You might pay income tax on dividends, but if you sell the stock for more than you paid for it you will pay capital gains. Or you need a new accountant. ---
**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\ **Post date:** [August 6, 2015, 7:23pm UTC](https://boards.straightdope.com/t/tax-question/727174/18 "2015-08-06T19:23:37Z")
> [@copperwindow](#): > > Not to nitpick, but I pay income tax on my stocks, not capital gains. You pay income tax on stocks if you receive dividends (in which case you are paying income tax on the dividend payment, not the stock itself) or if you receive shares as part of your compensation. If you sell stocks for more than you bought them for, you pay capital gains taxes on that profit. If you sell at a loss, you can deduct that loss from your capital gains. You don’t get to deduct it from your earned income, or gambling income. ---
**Author:** ![Omar\_Little](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/omar_little/32/269_2.png) [@Omar\_Little](https://boards.straightdope.com/u/Omar_Little)\ **Post date:** [August 6, 2015, 8:26pm UTC](https://boards.straightdope.com/t/tax-question/727174/19 "2015-08-06T20:26:08Z")
> [@friedo](#): > > If you sell stocks for more than you bought them for, you pay capital gains taxes on that profit. The length of time you held the stock dictates whether you use the short term capital gains tax rate or the long term capital gains tax rate. ---
**Author:** ![dracoi](https://avatars.discourse-cdn.com/v4/letter/d/90db22/32.png) [@dracoi](https://boards.straightdope.com/u/dracoi)\ **Post date:** [August 6, 2015, 9:47pm UTC](https://boards.straightdope.com/t/tax-question/727174/20 "2015-08-06T21:47:42Z")
> [@SenorBeef](#): > > People misunderstand what “you can deduct gambling losses” means. It just means that you get taxed on the net result of your gambling. > > Let’s say you’re playing blackjack. You bet $50. You play 21 hands. You lose 10 hands, and win 11. So you lost $500, but won $550, for a net result of +$50. > > If only your winnings counted, and you couldn’t deduct your losses against them, you’d be taxed on the $550 even though it’s only a net gain of $50. So of course you deduct your losses - 550 - 500 = 50, and that’s your taxable income. > > At least that’s my understanding. People who misuse this idea seem to think that if you go out and lose a lot of money, you don’t owe any taxes anymore on your income. Some of what you say is true only for certain types of gambling, but it would be wrong for other types of gambling. [Next page](https://boards.straightdope.com/t/tax-question/727174.md?page=2)