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" (H.R. 6985) aims to amend the Internal Revenue Code of 1986 regarding wagering losses. Specifically, it seeks to reinstate the rule that losses from wagering transactions are allowed only to the extent of gains from such transactions. This change would apply to taxable years beginning after December 31, 2025.
Expected Effects
The primary effect of this bill is to limit the ability of taxpayers to deduct wagering losses beyond their wagering gains. This could increase tax revenue for the government, as some taxpayers who previously offset other income with wagering losses will no longer be able to do so. The bill's impact will largely be felt by individuals who engage in frequent wagering activities.
Potential Benefits
- Potentially increased tax revenue for the government.
- May discourage excessive gambling by limiting tax benefits.
- Could simplify tax reporting for some individuals.
- Addresses a specific area of tax law that has been subject to debate and potential abuse.
- May create a more level playing field for taxpayers who do not engage in wagering.
Most Benefited Areas:
Potential Disadvantages
- Could negatively impact individuals who rely on wagering loss deductions to offset gains.
- May be perceived as unfair by those who view wagering as a legitimate form of entertainment or income.
- Could lead to decreased reporting of wagering gains if individuals seek to avoid the loss limitations.
- May disproportionately affect individuals with lower incomes who engage in wagering activities.
- Could increase the complexity of tax compliance for individuals who both win and lose in wagering.
Constitutional Alignment
The bill aligns with the constitutional power of Congress to lay and collect taxes, as outlined in Article I, Section 8, Clause 1. The specific rules governing deductions are within the purview of Congress's authority to create and modify tax laws. There are no apparent conflicts with individual rights or freedoms guaranteed 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).