John D. Smith and Hazel B. Smith - Page 7

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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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