In Daniel's case, can he claim a deduction for his gambling losses?

Daniel can claim a deduction for his gambling losses only if he itemizes deductions on his tax return. The IRS permits taxpayers to deduct gambling losses to the extent of their gambling winnings, but this deduction is only available for those who choose to itemize rather than take the standard deduction.

When itemizing, the losses must be reported on Schedule A, and they can only offset the amount of winnings reported. This means that if Daniel has $1,000 in gambling winnings and $1,200 in losses, he can only claim a deduction of $1,000, effectively reducing his taxable income to reflect only the net gain from gambling activities.

For those who opt for the standard deduction instead of itemizing, the ability to claim gambling losses is not available, thereby implying no deduction can be claimed. This deduction is specifically designed to follow the principle that taxpayers should not benefit from losses more than their reported gains.