Us lottery taxation?

Question

All money paid in any form of gambling in the US is " tax paid " money. My question is.........since the winnings are taxable, why cant people deduct their bets on their taxes?...sounds fair to me...........a scenario...go to Vegas with $50,000 lose all of it..........except for $5.............then win $50,000 on a machine.......its taxable...........something is wrong here............

Answer 1

You CAN deduct your gambling losses uo to the amount you win.  If you play $10,000 and lose it,  then  winner $50,000..... only $40,000 is taxable.

Again you can only deduct UP TO the amount you win.

Answer 2

Losses are deductible, but only as much as you claimed in winnings that year.

Schedule A, Line 28, "Miscellaneous Deductions"

But, you can't subtract the losses from the winnings before you enter it on your taxes.  

You have to enter the winnings on the front (so that they match up with the W2-G records the IRS got from the casino).

And your deduction for losses may have to survive an audit.  Which is one reason casinos offer an "annual win-loss statement".