Re: Listing Gambling Losses as Itemized Deductions: Why is this different?
Take a medical expense deduction. You can deduct substantial medical expenses. What is substantial? The definition is based on a percentage of your gross income. If your gross income is inflated with poker winnings (instead of just adjusted by the net), then you have to spend a whole lot more on medical expenses before it becomes a deduction.
Some deductions are rendered ineligable based on your gross income. Poker winnings inflate your gross income. The AMT stands for Alternative Minimum Tax. If your gross is high enough, instead of taking a deduction you just pay an alternative flat rate on the gross, which results in more taxes paid.
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