BIR Ruling No. 046-62

February 15, 1962 BIR RULING NO. 046-62 Mr. Ciriaco G. Luardo 380 Bonifacio St. Davao City S i r : This is in reply to your letter dated May 26, 1959, requesting opinion on whether or not losses from unsold sweepstakes tickets are deductible from gross income. The holder of processor of sweepstakes ticket, before and during the draw, participating in a wagering transaction or game or chance. He may either win or loss the prize at stake. Hence, a sweepstakes agent with unsold tickets in his possessors or holders. Like his customers, he also assumes the position of a wagerer, in which case pursuant to Section 30(d)(6) of the Tax Code, the losses he may incur therefrom can be allowed as deduction only up to the extent of the gains realized, on the supposition that these gains are accordingly declared as income. However, unlike other wagering transactions, sweepstakes prize winnings are exempt from income tax pursuant to Republic Act No. 1169, which took effect on June 18, 1954, and are, therefore, not to be reported as income. Such being the case, losses incurred therefrom cannot be allowed as deduction from gross income. LLphil Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue