<p>Yes, the gambling will be added to AGI.
It will then be deductible as part of Schedule A on the tax return.
If she won 25k in one shot, she should have a W2-G showing those winnings.</p>
<p>What might help is that while it is included in AGI, it is not included in “Earned Income” which is also reported - it goes on line 21 of the 1040 form. You will need to fill out the FAFSA correctly, reporting it as part of AGI. Then after you get your report back telling you your EFC you may need to contact Financial Aid offices directly to ask for professional judgement. </p>
<p>You need to talk with your mother and explain how this impacts your ability to go to college. Nothing can be done about last year, and it doesn’t mean she can’t go to the casino, but if she does she needs to put the winnings away and not touch them. She can’t adjust her “budget” of how much she can gamble, because during the college years, it will cost you/her dearly.</p>