- 2 - Respondent determined a deficiency of $532 in petitioners' 1996 Federal income tax. Respondent conceded that petitioners did not fail to include original issue discount of $20.75 in their income. The sole issue for decision is whether petitioners failed to report as income gambling winnings of $3,500. Some of the facts in this case have been stipulated and are so found. Petitioners resided in Wilmington, Illinois, at the time they filed their petition. In 1996, petitioners, who are not professional gamblers, gambled at the Empress Casino Joliet, the Empress Casino Hammond, and Harrah's Joliet Casino. Petitioner Mary Carver won $2,000 on one occasion, and petitioner Eddie Carver won $1,500 on one occasion. These amounts were reported to the Internal Revenue Service. We accept petitioner Mary Carver’s testimony that their gambling losses exceeded their gambling winnings. Petitioners did not report the gambling winnings or losses on their 1996 tax return. They did not itemize their deductions, and instead claimed the standard deduction. Petitioners contend that the gambling winnings should not be included in their income because they had losses that exceeded their winnings. Respondent contends that the winnings must be included in petitioners' income. Gross income includes all income from whatever source derived, including gambling winnings. Sec. 61(a); CommissionerPage: Previous 1 2 3 4 Next
Last modified: May 25, 2011