2
After concessions,2 the issues for decision are: (1) Whether
petitioners are engaged in the business of being professional
slot machine players, and, if so, whether they are entitled to
claim certain gambling related expenses as ordinary and necessary
business expenses under section 162; (2) whether petitioners are
entitled to deduct the portion of their gambling losses that
exceeds their gambling winnings; and (3) whether petitioners are
liable for an addition to tax under section 6651(a)(1).
Some of the facts have been stipulated and are so found.
The stipulation of facts and attached exhibits are incorporated
herein by this reference. Petitioners resided in Reno, Nevada,
at the time their petition was filed.
Petitioner Bernard F. Kochevar, Sr. (Mr. Kochevar) has been
employed by Welsh Engineering, Inc. as an engineer and surveyor
since 1988, and, according to his testimony, works an average of
50 to 70 hours each week. Petitioner Marlene C. Kochevar (Mrs.
Kochevar) is a paralegal, and, during 1990, worked for several
employers. For several months during the year, Mrs. Kochevar
maintained a full-time position with the Airport Authority in
Nevada, as well as a part-time position with Welsh Engineering,
Inc. as an evening contract typist. At all times during 1990,
Mrs. Kochevar maintained full-time employment.
2 Petitioners concede that they failed to report interest income of $45
and nonemployee compensation of $1,253.
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