Trade or Business (Deductible v. Not Deductible)

ID:
Office:
UILC:
CCA_2009021216482148
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165.08-00, 162.00-00
Number: 200912012
Release Date: 3/20/2009
From: ---
Sent: Thursday, February 12, 2009 4:48:23 PM
To: ---
Cc:
Subject: RE: Memorandum AM2008-013
Hi ---
That is correct. Here is an example if it helps.
Taxpayer, a professional gambler, has $400 of wagering gains, $500 of wagering losses, and $200 of business expenses. The taxpayer must report the $400 of wagering gains as gross receipts. The taxpayer then may subtract only $400 of his $500 of wagering losses from gross receipts, completely offsetting his $400 of wagering gains. The taxpayer may not carry over the excess $100 of (unused) wagering losses to offset wagering gains or other (non-wagering) income in another taxable year. The taxpayer may then, also, deduct the $200 of business expenses.
Hope this helps,
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