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Discussion
I. Gambling Losses
The first issue is whether petitioner is entitled to deduct
alleged gambling losses, over the $7,984 already allowed by
respondent, against his unreported gambling winnings of $25,309.
Petitioner argues that although he failed to report gambling
winnings of $25,309 for the 1994 taxable year, he incurred
sufficient gambling losses during that year to offset his
unreported gambling winnings pursuant to section 165(d).
Petitioner has submitted 83 Race Tickets in the aggregate face
amount of $12,790 and a copy of the TPA Complaint to establish
unreported Casino gambling losses of at least $50,000.
Respondent asserts that the evidence submitted by petitioner is
insufficient to substantiate petitioner's claimed gambling
losses.
Section 165(a) allows a deduction for losses sustained
during the taxable year and not compensated for by insurance or
otherwise. Section 165(d) provides: "Losses from wagering
transactions shall be allowed only to the extent of the gains
from such transactions." Under section 1.165-10, Income Tax
Regs., gambling losses are limited to the extent of gains from
such transactions during the taxable year. The amount of
petitioner's gambling losses is a question of fact to be
determined from the entire record. See Green v. Commissioner, 66
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