Office pools, fantasy football, that lucky pull in a Vegas slot machine — your windfall may or may not be exactly legal, but it is taxable.
The humble office pool is illegal in most states, but law enforcement usually ignores it. But the IRS doesn't. If you itemize, you must report the income. On the other hand, if you itemize, you can deduct losses.
In states where fantasy football is legal, any winnings should be treated as hobby income. Legal or not, the IRS expects you to report income from winnings. If you itemize, you can deduct entrance fees if those fees exceed 2 percent of your adjusted gross income, according to the IRS.