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IRS Rules Lottery Loss Deductions From eBay Tickets

8/15/2026

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Story summary
  • eBay sellers list expired losing lottery tickets as collectibles for $10-$575.
  • UNC professor Jeffrey Hoopes says buyers may use the tickets to claim gambling-loss tax deductions.
  • IRS Topic 419 permits loss deductions only for itemizers who document winnings and losses, capped at reported winnings.
  • A 2024 TIGTA audit found $13.2 billion in omitted winnings, costing the IRS $1.4 billion, while the 2025 One Big Beautiful Bill Act will cap deductible losses at 90% of winnings in 2026.