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intent.2 For each year in issue, petitioners claimed Schedule C
deductions for losing wagers and related expenses that exceeded
the reported gains from wagering transactions. Pursuant to
section 165(d), petitioners are entitled to deduct losing wagers
and related expenses only up to the amount of gains from wagering
transactions. Respondent’s adjustments in this regard are
therefore sustained.
To reflect the foregoing,
Decision will be
entered for respondent.
2 We note that for each year in issue petitioners reported
only those gains from wagering transactions evidenced by a Form
W-2G, Certain Gambling Winnings. We further note that only
certain gains from slot machine play require the issuance of a
Form W-2G. See sec. 31.3402(q)-1, Employment Tax Regs. Although
no issue has been presented on the point, given the nature of
slot machine play, we think it unlikely that all of petitioner’s
gains from slot machine play were subject to the issuance of a
Form W-2G. Lastly, we note that in enacting the predecessor of
section 165(d), the Congress was concerned that “taxpayers take
deductions for gambling losses but fail to report gambling
gains.” H. Rept. 704, 73d Cong., 2d Sess. (1934), 1939-1 C.B.
(Part 2) 554. Thus, one purpose of section 165(d) is to “force
taxpayers to report their gambling gains if they desire to deduct
their gambling losses.” Id.
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