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Background
On Schedule C of petitioner's 1994 Federal income tax
return, petitioner listed his principal business or profession as
"consulting", and indicated that he is a cash receipts and
disbursements method taxpayer.
In the statutory notice of deficiency, respondent made the
following adjustments regarding petitioner's 1994 taxable year:
Exemption for daughter $2,450
Unreported gambling winnings 25,309
Schedule C expenses 107,850
Self-employment tax deduction (2,684)
Itemized deductions 2,204
Deduction for exemptions 1,813
Total adjustments 136,942
Petitioner was not entitled to claim an exemption for his
daughter on his 1994 Federal income tax return.
Gambling Activity
During the 1994 taxable year, petitioner received gambling
winnings as follows:
New York Racing Association $14,510
Yonkers Raceway 5,370
MGM Grand Hotel & Theme Park 11,745
Boardwalk Regency Corporation 1,668
Total 33,293
However, petitioner reported only $7,984 of gambling winnings
($25,309 less than what should have been reported) and deducted
$7,894 in gambling losses on Schedule A of his 1994 Federal
income tax return. Respondent allowed petitioner a gambling loss
of $7,984 and does not dispute the $90 difference.
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Last modified: May 25, 2011