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either her winnings or her losses from gambling during 2002.
Further, petitioner’s gambling income of $265,795 for 2002 was
established only by an examination of her Forms W-2G, Certain
Gambling Winnings, and petitioner appeared unaware of the
specific figure until confronted by respondent. At trial,
petitioner submitted no evidence to validate her claimed gambling
losses, relying only on the theory that her losses must have
equaled her earnings because she found herself in debt at the end
of the year.3 We conclude that petitioner has failed to satisfy
her burden of substantiating her losses.
As a general rule, if the trial record provides sufficient
evidence that the taxpayer has incurred a deductible expense, but
the taxpayer is unable to substantiate adequately the precise
amount of the deduction to which he or she is otherwise entitled,
the Court may estimate the amount of the deductible expense, and
allow the deduction to that extent. Cohan v. Commissioner, 39
F.2d 540, 543-544 (2d Cir. 1930); Vanicek v. Commissioner, 85
T.C. 731, 742-743 (1985); Sanford v. Commissioner, 50 T.C. 823,
827-828 (1968), affd. per curiam 412 F.2d 201 (2d Cir. 1969);
sec. 1.274-5T(a), Temporary Income Tax Regs., 50 Fed. Reg. 46014
3 Petitioner testified that she determined her gambling
losses were greater than her winnings because she took out a
second mortgage on her house for $25,000 in 2002 and spent the
money on slot machines. Petitioner claimed she was still $25,000
in debt at the end of 2002, and inferred that this was because
her gambling expenditures outpaced her earnings.
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