Which of the Following Statements About the Tax Consequences of Gambling

question 23

Multiple Choice

Which of the following statements about the tax consequences of gambling is true?

• A) Gambling winnings are not taxable, and gambling losses are not deductible.
• B) Gambling losses are an above-the-line deduction.
• C) Gambling losses are deductible as itemized deductions only to the extent of gambling winnings.
• D) Gambling winnings are taxable, but gambling losses are not deductible.

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Definitions:

Registered Bonds

Bonds that are recorded in the name of the holder on the issuing company's books, ensuring that only the registered holder receives interest payments.

Term Bonds

Bonds that have a fixed maturity date on which the principal amount of the bond is due to be paid.