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Gambling losses: All bets are off

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in Small Business Tax

Q. In recent issues, you said gambling losses are miscellaneous deductions subject to the 2 percent limit of adjusted gross income. I don’t believe that’s correct. N.K., via e-mail

A. You’re right, and we were wrong. We apologize. You can deduct your annual gambling losses up to the amount of your winnings as a miscellaneous expense on Form 1040 Schedule A. However, unlike most other deductible miscellaneous expenses, there is no 2 percent-of-AGI floor for gambling losses. The losses are deducted without applying this limit.

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