- 7 - substantial, was more consistent with a hobby than a trade or business. He argues that he spent a significant amount of time studying “cycles” of video poker machines, reading publications relating to video poker, and practicing on his own video poker machine in order to “achieve greater success while gambling.” These efforts would be consistent with a desire to win money. However, the desire to win money is consistent with gambling purely for its entertainment or recreational aspects, and we find that petitioner gambled primarily for this reason rather than primarily for profit. Finally, we note that petitioner is semiretired and in 1996 received a substantial amount of income: Excluding his business loss of $3,415, he received over $40,000 in interest, individual retirement account distributions, and Social Security benefits. This income and petitioner’s semiretired status indicate that he was not relying upon gambling for his livelihood. In his trial briefs, petitioner discusses the material participation requirements of section 469 and the regulations thereunder. First, petitioner points to the references in these provisions to 500 hours of participation in an activity, arguing that he was in the trade or business of gambling because he devoted nearly twice that amount of time. See, e.g., sec. 1.469- 5T(a)(1), Temporary Income Tax Regs., 53 Fed. Reg. 5725 (Feb. 25, 1988). These provisions govern whether a trade or business isPage: Previous 1 2 3 4 5 6 7 8 9 Next
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