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Security payments of $10,312, of which $914 was includable in
gross income.3 As a result, respondent determined a deficiency
in petitioner’s 2003 Federal income tax of $948.
On April 25, 2005, petitioner filed a petition with this
Court. Upon order of the Court, petitioner filed an amended
petition on May 16, 2005, contesting respondent’s determinations
in the notice of deficiency.
OPINION
The first issue for decision is whether petitioner must
include $2,800 in gambling winnings in her gross income for 2003.
For Federal income tax purposes, “gross income” means “all income
from whatever source derived”, including gambling. Sec. 61(a);
Lutz v. Commissioner, T.C. Memo. 2002-89. Therefore, we hold
that petitioner must include $2,800 in gambling winnings in her
gross income for 2003.
The second issue for decision is whether petitioner may use
her gambling losses to offset her gambling winnings. In the case
of a taxpayer not engaged in the trade or business of gambling,
gambling losses are allowable as an itemized deduction, but only
to the extent of gambling winnings. See sec. 165(d). If such a
taxpayer takes the standard deduction instead of itemizing her
3 Respondent also determined that petitioner received non-
employee compensation of $660 from Greyhound. Respondent
concedes that this amount should not be included in petitioner’s
taxable income. See supra note 1.
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