on a gambling history statement, w2G amounts are listed and net win/loss amounts are listed. Do net win/loss include jackpots or w-2G amounts. Thus a net loss of 2000 with a w2G win of 4000 would mean 6000 spent to win 4000?
That's the way I interpret it. If all the statements show a net loss and I get a statement from all the institutions (big IF), I use that to justify a Sch A deduction equal to the gambling income. It is imperative that your income cover the total W-2G's actually reported to IRS; this can be a problem if your client isn't good about turning them over to you. (I once showed gambling income of twice the amount from the W-2G's that I had and still got an IRS notice that the gambling income was still underreported).
IRS has recently given new guidance on how to keep adequate records of wins and losses on a session by session basis. (I can't give you a citation right now, but it should be on the IRS website.) I think I finally convinced my gambling client to keep a notebook in 2009.
Good luck - I think this is a tough area and educating your client can be difficult.
