<p>Did your mom keep a documented record of her losses? If not, then she won’t be able to deduct her losses. </p>
<p>It’s kind of sad that a low-income person would win $25k and then turn around and gamble it away. :(</p>
<p>Since this increase on FAFSA may prevent you from getting the aid you need, you may need to take a gap year and then next year this won’t show up.</p>
<p>Swimcatsmom is right: If she had gambling income, that must be reported to the IRS and will be included as income on her tax returns. From a tax standpoint documented gambling losses (i.e.must have receipts/records) can be used as an itemized deduction but only up to the amount of any gambling income (not any other type of income) on the tax return.</p>