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Because petitioners did not consider small amounts won to be
consequential, and they did not consider breaking even to equate
to winning, we have no basis to calculate, or estimate,
petitioners' unreported bingo winnings. Without some basis for
estimating petitioners' 1994 unreported bingo winnings it is
impossible to determine whether petitioners' bingo losses
exceeded those winnings. Accordingly, they are not entitled to
any deduction for bingo losses. It follows, and we hold, that
respondent's adjustment increasing their 1994 income by the
excess of the bingo winnings reported on Forms W-2G over reported
gambling winnings is sustained.
Long-Term Disability Benefits
Petitioners did not report any portion of the long-term
disability benefits Mr. Smith received from Hartford in 1994.
The parties appear to agree that the group plan subscribed to by
Consolidated constitutes an accident or health plan within the
meaning of sections 104(a)(3) and 105(a), and we proceed as
though it does. Simply stated, the statutory scheme framed
by these sections allows a taxpayer to exclude from income
amounts received through accident or health insurance plans if:
(1) The taxpayer paid for the insurance; or (2) the amounts were
attributable to contributions by the taxpayer's employer that
were includable in the taxpayer's gross income. Sec. 104(a)(3).
On the other hand, amounts received by an employee through
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