In 2018, Frank Fox won $10,000 in a state lottery. He also lost $3,000 at the horse races. He itemized his deductions on Schedule A. On his income tax return he should report: 1) $10,000 gross income 2) $7,000 gross income 3) $10,000 gross income and $3,000 deduction for adjusted gross income 4) $10,000 gross income and $3,000 itemized deduction 5) None of these