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    LaurenCloxy Member

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    <h2>How does the stake factor into sports betting winnings</h2> <p>@TomK100 is correct. If you bet $100 to win $50, only your $50 in winnings are taxable (assuming you only made one bet). Your Form W-2G will show $50 in ?Reportable winnings? in Box 1. The $100 is your money.</p> <p>The other answers involve situations where there were multiple bets with some bets resulting in a loss.</p> <p>The IRS only allows you to deduct gambling losses up to the extent of your winnings. However, in answer to your question about how your stake factors into your winnings, the Tax Court held in Shollenberger v Commissioner T.C. Memo. 2009-306 (2009) that you can report as gambling winnings the difference between what you started and ended with if you keep records for each session .</p> <p>In Shollenberger the petitioners entered a casino with $500 and left with $1,600 (an $1,100 taxable gain). However, during their stay they actually won $2,000 and lost $400. The IRS said they should have reported $2,000 in gambling winnings. The court held $1,100 was taxable.</p> <p>The court said: ?Drawing an analogy to the recovery of a capital investment, this Court has held that a casual gambler's gross income from a wagering transaction should be calculated by subtracting the bets placed to produce the winnings, not as a deduction in calculating adjusted gross income or taxable income but as a preliminary computation in determining gross income.?</p>
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