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v. Groetzinger, 480 U.S. 23, 34 (1987). Gambling losses are
deductible only to the extent of the taxpayer's winnings from
such transactions. Sec. 165(d); sec. 1.165-10, Income Tax Regs.
Taxpayers not engaged in the trade or business of gambling must
report all gambling winnings as gross income and may claim
gambling losses only as an itemized deduction to the extent of
the gambling income. McClanahan v. United States, 292 F.2d 630,
631-632 (5th Cir. 1961).
We hold that petitioners must include the $3,500 of gambling
winnings in their income. Petitioners have no other itemized
deductions to add to the $3,500 of gambling losses which were
eligible to be taken as an itemized deduction. Petitioners
benefited from the election of the standard deduction of $6,700.
Accordingly, we sustain respondent's determination on this issue.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011