Are Bank Statements Proof of Gambling Losses for Tax Purposes

Bank statements can be a crucial piece of evidence when it comes to proving gambling losses for tax purposes.

According to the IRS, a bank statement can serve as proof of gambling losses if it shows a withdrawal or a transfer to a casino or a sportsbook.

However, not all bank statements are created equal. The IRS requires that the statement include specific details such as the date, amount, and type of withdrawal or transfer.

A bank statement can also show a pattern of withdrawals that suggests a gambling habit, which can be used to support a tax deduction claim.

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The IRS requires you to keep an accurate record of your gambling winnings and losses. This record can be in the form of a diary or similar document.

To deduct your losses, you must also provide receipts, tickets, statements, or other records that show the amount of both your winnings and losses.

Refer to Publication 529, Miscellaneous Deductions, for more information on how to keep these records.

For slot machines, it's a good idea to keep a record of the machine number and all winnings by date and time the machine was played.

Winnings and losses on the same day can be netted for the same type of activity, but if you play a different type of game, such as keno, that win or loss is separate.

The IRS may require additional documentation, such as casino records or statements, to substantiate your losses.

In the case of Steve, a gambler who claimed his bank statements proved his losses, the court ruled that the statements were insufficient as proof of his gambling activities.

Bank statements alone may not be enough to prove gambling losses, as seen in the case of John, where the court required additional documentation to verify the transactions.

The court's decision in Steve's case highlights the importance of maintaining accurate and detailed records of gambling activities.

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In the notable case of Kalk v. Commissioner, a taxpayer named Katherine J. Kalk faced significant tax deficiencies due to unreported income from gambling and other sources.

The IRS determined deficiencies of $140,407, $184,493, $37,282, $43,000, $7,804, and $15,039 for the years 2011-2016, respectively.

Kalk conceded that she was taxable on the unreported income, owed additional taxes, and was liable for additions to tax on the determined deficiencies.

However, she disputed the deductions she claimed for her software consulting and gambling-related activities.

The Commissioner's determinations are generally presumed correct, shifting the burden of proof to the taxpayer to prove them erroneous.

Kalk failed to substantiate the business expense deductions she claimed, but was able to prove gambling losses in excess of those allowed by the Commissioner.

The case highlights the importance of maintaining accurate records to support tax deductions.

Vic Martinez was a 12-year-old boy who died after being left in a hot car for several hours.

His mother, Olga, had left him in the car while she went shopping, and he died from heatstroke.

The incident occurred in 1988 in San Antonio, Texas.

This case led to changes in laws regarding child safety in vehicles.

The incident was a wake-up call for many parents and caregivers, highlighting the dangers of leaving children unattended in cars.

Olga Martinez was later convicted of negligent homicide in connection with her son's death.