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petitioner during 1996 and withheld $14,335 of that amount for
Federal and State taxes.
Respondent determined that petitioner’s gross income
includes the $32,050 in gambling winnings shown on the Forms W2-
G. Petitioner admits that he received those winnings and that he
did not report any of them on his 1996 Federal income tax return.
Petitioner contends that he also had gambling losses for that
year which exceeded his winnings.
Petitioner’s gambling winnings are includable in his gross
income. Sec. 61(a); Commissioner v. Glenshaw Glass Co., 348 U.S.
426 (1955). As to his alleged gambling losses, petitioner bears
the burden of proving that he sustained gambling losses and, if
so, the amount of those losses. Stein v. Commissioner, 322 F.2d
78 (5th Cir. 1963), affg. T.C. Memo. 1962-19. Section 165(d)
provides that “Losses from wagering transactions shall be allowed
only to the extent of the gains from such transactions.”
Petitioner relies primarily on his testimony to prove his
allegation. We find his testimony to be incredible and decline
to rely on it.1 Although we acknowledge that petitioner most
likely had some gambling losses during the year, we are unable to
1 For example, petitioner testified that during 1996 he had
“taken home” approximately $75,000 of his salary from his
employer and that he gambled away most of that amount and some of
his savings. The record, however, reveals clearly that
petitioner’s gross salary was only $51,600 and that, of that
amount, he took home at the most $37,265.
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