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A high roller who bet on some creative tax accounting has lost an appeal in court. The Canadian man tried to deduct more than $96,000 in gambling losses as business expenses.
Giuseppe Tarascio's business-expense claims may have been a gamble from the start, but the phone-company technician tried to back them up with proof, the Toronto Sun reports.
Tarascio kept records of his gambling and touted his "special knowledge and skill as a gambler" in trying to claim casino and horse-betting losses as business expenses, according to the Sun. But a Canadian appeals court held that wasn't enough.
Giuseppe Tarascio "had little by way of a systematic method for gambling and spent no time practising his skills," the appeals judge wrote in his decision.
Further, Tarascio's recordbooks were created solely for the purpose of supporting his tax-deduction claims -- not in the regular course of business, the judge found.
The judge even discounted Tarascio's argument that his degree in mathematics and training in probability theory bolstered his claim that gambling was his business.
"I could have won this case if I had a lawyer," Tarascio told the Sun. "If the casinos can make money from me, then I should be able to claim the amount."
In the United States, the IRS has special rules for gambling income. Winnings are always taxable, and must be reported on Form 1040. If you itemize your deductions, you can deduct gambling losses on Form 1040 -- but not if your losses are more than your winnings, according to the IRS.
A taxpayer must also provide receipts to prove the amount of winnings and losses. You may want to consult a tax attorney to make sure your gambling income is correctly reported.
As for Giuseppe Tarascio, he's prepared to double down to get his tax deduction. He wants Canada's Supreme Court to hear his gambling-as-business-expenses case -- once he gets a lawyer, that is. "I am very serious about this," Tarascio told the Sun.
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.