The Oklahoma Bar Journal May 2026

that “losses from wagering trans actions” include “any deduction otherwise allowable under this chapter incurred in carrying on any wagering transaction.” 4 That addition pulled certain expenses – travel, subscriptions, data and similar items – into the umbrella of §165(d), a significant change for taxpayers attempting to treat gam bling as a trade or business. 5 The TCJA version of this rule was scheduled to sunset after 2025. Then, along came Public Law 119-21, which provides the current incarnation of §165(d). 6 For taxable years beginning after Dec. 31, 2025, amended §165(d) effectively reduces the maximum deduction for aggre gate wagering losses to 90% of those losses, while remaining subject to the winnings ceiling. The 90% limitation matters only when the winnings ceiling is not already the binding constraint; therefore, it is most consequential for bettors who are net winners or near break-even. 7 Two points in this simple change are easy to miss. First, Congress

Statements or opinions expressed in the Oklahoma Bar Journal are those of the authors and do not necessarily reflect those of the Oklahoma Bar Association, its officers, Board of Governors, Board of Editors or staff.

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THE OKLAHOMA BAR JOURNAL