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5. Adjustment for Sylvia’s Gambling Expenditures
Petitioners maintain that gambling expenditures included in
Sylvia’s source and application of funds analyses for 1987
through 1989 should be eliminated because respondent did not
substantiate those items at trial. See infra Appendices F
through H. Respondent maintains that Sylvia’s source and
application of funds analyses are correct. Respondent asserts
that petitioners agreed to these gambling expenditures in
proposed joint findings of fact No. 4. In addition, respondent
states that the record establishes that Sylvia went on one or two
gambling vacations each year, and that she participated in
gambling activities.
Joint findings of fact No. 4 states as follows: “The
parties agree that the figures shown in black are the items of
the source and application of funds analysis for which the
parties are in agreement and in red for which the parties are not
in agreement.” The gambling expenditures to which petitioners
now take exception were shown in black on respondent’s Appendix
5. We take the statements in joint findings of fact No. 4 to
represent a concession by petitioners that Sylvia incurred the
gambling expenditures in the amounts stated. Cf. Hodges v.
Commissioner, 50 T.C. 428, 434, 435 n.2 (1968) (certain
statements in respondent’s brief found to be a concession);
Armour v. Commissioner, 41 B.T.A. 777, 795 (1940) (statement in
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