THE CASE OF “OLLIE’S OX GOT GORED BY UNCLE”

Ollie gambled regularly but rarely won. Big surprise there. But, in 2007 he won $5000 on a couple spins of the wheel which was dutifully reported to Uncle Sam. We asked Ollie how he netted out the year and he replied he was $5000 down, overall. Big surprise again. Ollie was married and he and his wife lived in an apartment.

Now for the big surprise. We had to break the bad news that, while he had to pay income tax on his winnings, he couldn’t deduct any of his losses. You see, because he doesn’t have enough deductions to itemize like people who own a house, the amount of his possible deductions were not greater than his standard deduction, which he already had. Ollie got hosed by the system. It was a bitter pill to swallow to add $1000 to his existing net loss of $5000. Ollie’s wife had a few comments.

Fact of life. Uncle Sam discriminates against renters in more than this way. The economic tilt is heavily in favor of home ownership. So, if you’re going to gamble, buy a house and mortgage it to the hilt.

You gotta wonder about Uncle Sam sometimes.