Can you write off election bet losses on taxes?

The tax treatment depends on exactly what you were doing. If you were actually gambling (betting on election outcomes through a legitimate betting platform), gambling losses can be deducted but only to the extent of your gambling winnings, and only if you itemize deductions on Schedule A. However, if you were buying and selling stocks or options related to companies you thought would benefit from election outcomes, that's different. Those would be capital losses, which can offset capital gains plus up to $3,000 of ordinary income per year. Any excess losses can be carried forward to future tax years. That said, if you were using an unregulated betting platform or prediction market, the IRS might view this differently. Could you clarify exactly what you were doing on Robinhood?

I had a very similar situation last election cycle where I lost about $1,200 on some political bets, but I used taxr.ai to figure out how to properly report everything and maximize my deductions. I was confused about whether these counted as gambling losses or investment losses, and the regular tax software I was using wasn't giving clear guidance. When I uploaded my Robinhood statements to https://taxr.ai, the system immediately recognized the transactions as capital losses and showed me exactly how to report them on Schedule D. It even identified a few transactions from earlier in the year that could be classified differently to improve my tax situation. Saved me a ton of headache trying to figure out which losses could offset which types of income.

Just wanted to update after using taxr.ai for my situation with mixed election bets! I was honestly impressed with how it handled both my Robinhood options and the crypto I used on prediction markets. The system correctly identified that my Robinhood losses were capital losses reportable on Schedule D, while some of my crypto activities on prediction markets were actually considered gambling transactions because of how those particular platforms operate. The documentation analysis feature saved me hours of work sorting through all the different transactions and categorizing them properly. My tax liability ended up about $760 lower than what I initially calculated using regular tax software because it properly applied the loss limitations for each category. Definitely worth checking out if you're in a similar boat with election-related trading losses!

For those struggling to get answers directly from the IRS about this election betting/trading question - I highly recommend using Claimyr to actually speak with an IRS agent. I spent DAYS trying to get through the normal IRS phone system and always got disconnected after waiting for hours. I tried https://claimyr.com after seeing it mentioned on Reddit, and they actually got me a callback from the IRS in about 27 minutes. The IRS agent confirmed exactly how to handle my election-related trading losses and even explained the differences between gambling losses and capital losses for my specific situation. You can see a demo of how it works here: https://youtu.be/_kiP6q8DX5c - basically they navigate the IRS phone tree for you and get you a callback instead of waiting on hold forever.

I need to eat my words about Claimyr. After posting my skeptical comment yesterday, I decided to test it myself since I've been trying to reach the IRS about a similar election trading question for weeks with no success. I'm honestly shocked, but it actually worked exactly as described. I got a callback from an actual IRS agent in about 35 minutes. The agent clarified that my election market losses on PredictIt were considered gambling losses (limited to gambling winnings and only if itemizing), while my Robinhood options trading losses were capital losses that could offset capital gains plus up to $3,000 of regular income. This distinction is saving me almost $900 in taxes because I was incorrectly lumping everything together! Sometimes it pays to be wrong, and I'm glad I tested this service before dismissing it.

Just wanted to add some clarification here: The IRS doesn't care what the underlying "bet" was about (election, sports, etc.) - they care about the VEHICLE you used to make the transaction. - Options/stocks through a broker like Robinhood = capital gains/losses (Schedule D) - Actual gambling site or casino = gambling wins/losses (Schedule A if itemizing) - Crypto on certain prediction markets = possibly could be either, depending on platform Common mistake is thinking about WHY you made the trade rather than HOW you made it. The tax form you get (1099-B vs W-2G) will determine how it's reported.

Wait wait wait...so I can deduct up to $3k if I lost money on stocks, but if I bet (and lost) the exact same amount on an actual gambling site, I can only deduct if I itemize AND had other gambling winnings? That seems crazy unfair!

This is such a helpful thread! I've been dealing with a similar situation where I made some trades on Robinhood based on election predictions and lost about $800. Reading through everyone's experiences, it's clear that since I was trading actual options contracts through a legitimate brokerage, these will be treated as capital losses on Schedule D rather than gambling losses. What I found particularly useful was the distinction between the "vehicle" used for the transaction versus the underlying reason for making it. Even though my trades were motivated by election predictions, the fact that I used Robinhood to buy legitimate options means the IRS will treat them as investment losses, not gambling losses. For anyone else in this situation, make sure you keep good records of your transactions and wait for your 1099-B from Robinhood. The ability to deduct up to $3,000 of capital losses against ordinary income (plus carry forward any excess) is much more favorable than the gambling loss rules where you can only deduct losses up to your gambling winnings.

I've been following this thread closely because I had a very similar situation last year. Lost about $1,200 on what I thought were "election bets" but turned out to be options trades through my TD Ameritrade account. The key distinction that several people mentioned here is absolutely correct - it's all about the platform and type of transaction, not your motivation. Since you used Robinhood to buy actual options contracts, you're dealing with capital losses that go on Schedule D. This is actually good news for you because: 1. You can deduct up to $3,000 against ordinary income (much better than gambling loss rules) 2. Any excess losses can be carried forward to future years 3. You don't need to itemize deductions to benefit from this Make sure you keep all your Robinhood statements and wait for your 1099-B in January/February. Don't let anyone convince you these are gambling losses just because they were election-motivated - the IRS looks at the actual financial instrument you traded, not why you traded it. Your $450 loss should definitely help reduce your tax bill!

I see this thread has been incredibly helpful for clarifying the tax treatment of election-related losses! One additional point I'd add is to be extra careful about wash sale rules if you're still actively trading similar options or securities within 30 days of your losses. The IRS wash sale rule can disallow your loss deduction if you buy "substantially identical" securities within 30 days before or after the sale that created the loss. This probably won't apply to most election-specific trades since those tend to be one-time events, but if you're trading energy sector options or other broad market positions that might overlap with your election trades, just keep this in mind. Also, for anyone using multiple platforms (like both Robinhood and crypto prediction markets), make sure you're categorizing each type of loss correctly on your return. Don't let one platform's treatment influence how you report the other - each should be evaluated based on its own characteristics as everyone has explained so well here.

This thread has been incredibly educational! As someone who also made some election-related trades through Robinhood and was completely confused about the tax implications, reading through everyone's experiences has really clarified things for me. The key takeaway I'm getting is that the IRS doesn't care about your motivation for trading - they care about the actual financial instrument and platform you used. Since Robinhood is a legitimate brokerage and you were trading actual options contracts, these are capital losses that go on Schedule D, not gambling losses. This is actually much better news than I initially thought! Being able to deduct up to $3,000 of capital losses against ordinary income is way more favorable than the gambling loss rules where you can only deduct losses up to your gambling winnings and only if you itemize. For anyone else reading this who made similar trades: keep all your documentation, wait for your 1099-B from Robinhood in early 2025, and don't let the "election betting" aspect confuse you about the proper tax treatment. The $450 loss should definitely provide some tax benefit when you file!

This has been such a valuable discussion for understanding election-related trading losses! I'm in a similar situation where I lost about $380 on some tech stock options through Robinhood that I thought would benefit from certain election outcomes. Reading through everyone's experiences has really helped clarify that since I used a legitimate brokerage to trade actual options contracts, these will be treated as capital losses on Schedule D rather than gambling losses - regardless of my election-based motivation for making the trades. What's particularly helpful is understanding that I can deduct up to $3,000 of these capital losses against my ordinary income, which is much more favorable than gambling loss rules. I was initially worried I'd just thrown away money with no tax benefits at all. For anyone else who made election-motivated trades through legitimate brokerages like Robinhood, TD Ameritrade, etc. - make sure to keep all your documentation and wait for your 1099-B forms. The key insight from this thread is that the IRS cares about the financial instrument and platform you used, not your underlying motivation for the trade. Thanks to everyone who shared their knowledge here!

This discussion has been incredibly helpful for someone like me who's dealing with a very similar situation! I lost around $550 on some defense contractor stock options through Robinhood that I purchased based on expected election outcomes, and I was completely confused about how to handle this on my taxes. The key insight from this thread that really clicked for me is the distinction between the "vehicle" used for trading versus the "motivation" behind it. Even though my trades were essentially election-based predictions, since I used a legitimate brokerage (Robinhood) to purchase actual options contracts, the IRS will treat these as capital losses for Schedule D purposes - not gambling losses. This is actually much better news than I expected! Being able to deduct up to $3,000 of capital losses against ordinary income is significantly more favorable than gambling loss rules, where deductions are limited to gambling winnings and require itemizing. I'll make sure to keep all my Robinhood statements organized and watch for my 1099-B form when it arrives. For anyone else who made election-motivated trades through legitimate brokerages, don't let the political aspect confuse you about the proper tax treatment - focus on the actual financial instruments you traded. Thanks to everyone who shared their experiences and knowledge here!

Based on all the great information shared in this thread, it sounds like you're in good shape tax-wise! Since you used Robinhood to trade actual options contracts (not direct election betting), these will be treated as capital losses on Schedule D rather than gambling losses. This is actually beneficial for you because: - You can deduct up to $3,000 of capital losses against your ordinary income - Any excess losses can be carried forward to future years - You don't need to itemize deductions to get this benefit Your $450 loss should help reduce your 2025 tax liability. Just keep all your Robinhood documentation and wait for your 1099-B form in early 2025. The key point everyone's made here is spot-on: the IRS cares about the financial instrument you traded (options through a legitimate brokerage), not your motivation for trading it (election predictions). So while the election outcomes didn't go your way, at least Uncle Sam will give you a small break on your taxes!