>>>1. Gamblers must itemize their deductions to offset gambling losses against gambling wins.<<<

Don is correct. Gambling losses are not subject to the 2% reduction. However, one MUST itemize inorder to receive the benefit of loss reduction. If you take the standard deuction you cannot deduct your gambling loss. A few of my clients are pro poker players who are in the trade or business of tournament poker playing and therefore file a schedule "C" so none of the above applies to them.

>>>2. However, as a collector, you report chip/token sales on Schedule D (Capital Gains and Losses) and so offset your sales price with
your purchase price plus any commission you paid. If you keep your collectible for a year and a day or more, you also get the benefit of
Long Term Capital Gain tax rates on any gain.
Dealers can't do this as their sales are part of their business.<<<

Don is correct. The reason chip dealers cannot do this is because "chips" are part of their inventory and therefore considered ordinary income property and NOT Capital gain property.

>>>I'm sure JimP will have more to add to this subject.<<<

DonL

I would like to add the following:

All sales and purchases that take place on Ebay are recorded. For an individual NOT to report their gains on sales to the IRS is ludicrous. In addition, some states such as California already have started "Sale Tax Projects" to go after individuals who do not report California sales tax on sales that take place within the boundaries of California.

I normally do not give free tax advice. Afterall, I make a living from my tax work. However, I will share this: IF YOU SELL ON EBAY, REPORT YOUR GAINS AND HANDLE SALE TAX OBLIGATIONS IF APPLICABLE. Otherwise, you are asking for trouble.

Best, Jim