Facilitating Useful Loss Limitations to Help Our Unique Service Economy (FULL HOUSE) Act
Summary
The "Facilitating Useful Loss Limitations to Help Our Unique Service Economy (FULL HOUSE) Act" (S. 2230) aims to amend the Internal Revenue Code of 1986 regarding the rules for wagering losses. Specifically, it seeks to reinstate the provision that losses from wagering transactions are allowed only to the extent of gains from such transactions. This amendment would apply to taxable years beginning after December 31, 2025.
Expected Effects
The primary effect of this bill, if enacted, would be to limit the deductibility of wagering losses for taxpayers. This means that individuals could only deduct gambling losses up to the amount of their gambling winnings. The change aims to clarify and potentially simplify the tax treatment of wagering activities.
Potential Benefits
- Revenue Generation: Could potentially increase tax revenue by limiting deductions.
- Fairness: Ensures that taxpayers cannot use gambling losses to offset other income, potentially creating a fairer tax system.
- Simplicity: Reinstates a clear rule for wagering losses, reducing complexity for taxpayers and the IRS.
- Economic Impact: May encourage more responsible gambling behavior due to limited loss deductibility.
Most Benefited Areas:
Potential Disadvantages
- Impact on Gamblers: Individuals with significant gambling losses may face a higher tax burden.
- Reduced Economic Activity: Could potentially reduce spending on gambling activities, impacting casinos and related businesses.
- Complexity for Some: Taxpayers may need to keep detailed records of both winnings and losses to comply with the law.
- Enforcement Challenges: The IRS may face challenges in verifying wagering gains and losses.
Constitutional Alignment
The bill appears to align with the constitutional authority granted to Congress under Article I, Section 8, which provides the power to lay and collect taxes, duties, imposts, and excises. The amendment to the Internal Revenue Code falls under this power. There are no apparent conflicts with individual rights or liberties protected by the Constitution.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).