Taxation – Wagering Losses Deduction Limitation

Current understanding

IRS/Treasury has proposed amendments to regulations governing the deductibility of wagering losses under IRC §165(d), including extension and modification of existing limitations. The proposal is at the proposed-rule stage, with a public hearing scheduled. Who pays more/less: gamblers claiming wagering-loss deductions could see altered deductibility depending on final rule terms.

Evidence log

• 2024-07-31 — WAGER Act: cross-connection with wager-act: Both concern federal tax treatment of wagering; WAGER Act’s Finance Committee referral may intersect with wagering loss deduction limitations, pending release of operative text. (novelty: 2)
• 2026-07-02 — Increase in Threshold for Requiring Information Reporting With Respect to Certain Payees; Extension and Modification of Limitation on Wagering Losses; Hearing: cross-connection with taxation-information-reporting-thresholds: Both provisions are bundled in the same proposed rulemaking (REG-113229-25) and share a public hearing. (novelty: 2)

Open questions

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