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IRS Proposes Wagering Loss Deduction Limit to 90%, Raises Reporting Threshold to $2,000

The IRS has published a notice of proposed rulemaking to amend regulations under sections 165, 6041, 6041A, and 3406 of the Internal Revenue Code. The amendments reflect changes enacted by the One, Big, Beautiful Bill Act (Public Law 119-21). Key changes include limiting the wagering loss deduction to 90 percent of wagering losses (down from the prior 100-percent-of-gains limitation) and raising the information reporting threshold from $600 to $2,000 for payments made after December 31, 2025. Comments are due by June 16, 2026.