Doyle has gambling losses totaling $7,000 during the current year. Doyle's adjusted gross income is $60,000, including $3,000 in gambling winnings. Doyle can itemize the deductions. What amount of gambling losses is deductible?
Choice "C" is correct. Gambling losses are miscellaneous itemized deductions not subject to the 2% AGI limitation. The deduction for gambling losses are, however, limited to gambling winnings.
Choice "d" is incorrect. Gambling losses are deductible up to gambling winnings.
Choice "b" is incorrect. Gambling losses are not subject to the 2% limitation.
Choice "a" is incorrect. The deduction for gambling losses cannot exceed gambling winnings.
