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the extent of the gains from such transactions.” See also sec.
1.165-10, Income Tax Regs. Petitioner does not claim to be in
the trade or business of gambling, and we are, therefore, faced
with the question whether she is entitled to claim itemized
deductions on a Schedule A.
While we are convinced that petitioner purchased lottery
tickets that did not pay off, there are some obstacles in her
path. First, we have no idea as to the dollar amount of those
tickets. Petitioner appeared at trial with a paper bag full of
tickets; however, she did not know how many losing tickets were
in the bag. She had not counted them, and the Court eschews that
responsibility. We did, however, examine some of the tickets and
there appears to be an unsettling number of tickets from certain
days, even though petitioner testified that she played the
lottery almost daily. It seems as if the tickets had been picked
up on a random basis rather than daily.
Equally important, even if we were to assume that the amount
of losing tickets was as petitioner alleges (between $4,752 shown
in the petition and $6,000 at trial), we are still faced with the
problem that petitioner admits that she won considerably more
money than that which was reported to the Internal Revenue
Service. While respondent did not move to increase the
deficiency, the additional amount of unreported lottery winnings
and the amount contained in the notice of deficiency ($5,200)
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Last modified: May 25, 2011