Non Winning Lottery Tickets

Are you joking ?!
The lottery is OPTIONAL and as such completely unclaimable.

Only against winnings. This is true of any gambling. If you won lottery awards greater than $600, they will be reported to the IRS. You will then get a 1099 for them. You can then claim the amount spent on non-winning tickets against that money. So If you $1000 in one drawing but spent $1200 during the year, you can eliminate the $1000.

Yes, gambling losses, up to the amount of gambling winnings, can be claimed as itemized deduction.

The fact that the gambling losses are an itemized deduction may limit your ability to offset gambling winning by claiming the gambling loss.

Also, you have GOT to be careful with claiming lottery tickets as gambling losses.

Someone once won a large lottery prize (about $500,000). They tried to convince the IRS that they had bought $500,000 in lottery tickets in the same year they won the $500K prize.

The IRS did NOT buy it, even when the taxpayer provided a box full of lottery tickets for the year in question.

When appealed, the appeal was denied because buying THAT many tickets defies both logic and common sense. Think about it; buying $500,000 in $1 lottery tickets would require the taxpayer to buy OVER 1,350 tickets EVERY DAY of the year.

The IRS doubted that ANYONE would buy that many tickets even if they had the money. They also pointed out that, if that many tickets were purchased, the law of averages would dictate SOME of the tickets would be winning tickets on which taxes would be owed.

The IRS saw this for what it was: an effort to collect worthless lottery tickets from friends and relatives in order to offset the tax bill on the $500,000 prize.

Just for the record: when everything was said and done, the taxpayer ended up paying about TWICE what he would have paid had he just filed the tax return and paid what was due.

Good point that you have to itemize to be able to take the deduction.