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allowable only to the extent of gambling winnings under section
165(d).
In proceedings before this Court, the taxpayer argued that
the expenses incurred for transportation, depreciation, meals and
lodging, admission fees, and office supplies constitute business
expenses under section 162(a), rather than wagering losses under
section 165(d), and that such expenses are deductible by virtue
of section 162(a) notwithstanding the limitation imposed by
section 165(d).
Focusing on the tension between section 162(a) and section
165(d), we held that the Commissioner was correct in disallowing
the taxpayer's business expenses to the extent that those
expenses generated an overall loss from the taxpayer's gambling
business. In so holding, we relied on Estate of Todisco v.
Commissioner, 757 F.2d 1 (1st Cir. 1985), affg. T.C. Memo. 1983-
247, and Offut v. Commissioner, 16 T.C. 1214 (1951), as well as
the well-settled principle that a taxpayer cannot use a net
operating loss from gambling to offset income from other sources
or carry such a loss over or back to another taxable year.
Unlike the taxpayer in Kozma v. Commissioner, supra,
petitioner admits that he is not in the trade or business of
gambling and that he did not incur losses or expenses in excess
of his "wagering winnings". In this light, it is evident that
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