1. What is Mr. Wilsons total gambling loss/gain for this tax year?
2. Is there a loss or gain for tax year?
3. Can Mr. Wilson carryforward any losses in the next year?
Frank J. Wilson is a part-time CPA earning wages of $80,000 annually. Mr. Wilson is also a professional blackjack player whose gambling activities rise to the level of a trade or business. In some years he’s won a lot of money (over $1 million in winnings once), and in others he’s lost a lot of money.
This year, Mr. Wilson generated $25,000 in winnings and $216,000 in losses at the blackjack tables. Mr. Wilson keeps meticulous records of his gains, losses and expenses. Besides gambling winnings and losses described above, this year Mr. Wilson also incurred $3,000 in gambling business expenses that included supplies and telephone costs. He also spent $50,000 in traveling costs – flying first class or charter to his gambling destinations (Las Vegas and Monaco) and taking limousines to and from the airport.
The casinos picked up his meals, entertainment, and room costs of $150,000, that is, he was “comped” for these costs.