Pub 529

Gambling Losses Up to the Amount of Gambling Winnings 

   You must report the full amount of your gambling winnings on line 21, Form 1040.
   You deduct your gambling losses on line 27, Schedule A (Form 1040). You
   cannot deduct gambling losses that are more than your winnings. 

           You cannot reduce your gambling winnings by your gambling losses
           and report the difference. You must report the full amount of your
           winnings as income and claim your losses (up to the amount of
   winnings) as an itemized deduction. Therefore, your records should show your
   winnings separately from your losses. Only gambling losses incurred during
   the year can be deducted on Schedule A (Form 1040). 

   Diary of winnings and losses. You must keep an accurate diary or similar record
   of your losses and winnings. Your diary should contain at least the following
   information: 

      1.The date and type of your specific wager or wagering activity, 
      2.The name and address or location of the gambling establishment, 
      3.The names of other persons present with you at the gambling establishment,
        and 
      4.The amount(s) you won or lost. 

   Proof of winnings and losses. In addition to your diary, you should also have
   other documentation. You can generally prove your winnings and losses through
   Form W-2G, Certain Gambling Winnings, Form 5754, Statement by Person(s)
   Receiving Gambling Winnings, wagering tickets, canceled checks, credit
   records, bank withdrawals, and statements of actual winnings or payment slips
   provided to you by the gambling establishment.