Stanley B. and Rose M. Whitten - Page 13

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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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