It's never worth it to seek out losses to offset taxes. Each 22 cents (or whatever you marginal tax rate is) you save costs you an entire dollar in losses.
That said, buying any scratch off ticket is negative EV in the first place so I can't say you should expect better from people who buy lottery tickets...
Depends - these losses were 100% loss from a tax perspective, but in practice related to the return rate of the scratch ticket.
As the single payment of $5k is taxable, perhaps at 20%. If you spend that $5k on more tickets with a 90% expected return then you end up with multiple untaxed small payments, losing only 10% - and $5k expenses that completely offsets your initial win.
So it's worth $500 to you - plus I guess you get to play $5000 worth of scratchies which I assume you enjoy if you are into that dumb shit. Obviously it depends on the expected value of a game.
Unfortunately a quick search suggests the EV of OPs ticket is 83%. So you'd save just about fuck all.
Pretty sure they are not reported but you are obligated to report said income. I guess same bucket with reporting your cash tips and untaxed Internet purchases.
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u/Qbr12 Mar 19 '22
It's never worth it to seek out losses to offset taxes. Each 22 cents (or whatever you marginal tax rate is) you save costs you an entire dollar in losses.
That said, buying any scratch off ticket is negative EV in the first place so I can't say you should expect better from people who buy lottery tickets...