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contended that this income was offset by "thousands" of dollars
in gambling losses sustained that year. She admitted to other
winnings; however, none of those winnings were included on the
tax returns. Moreover, no books and records were maintained to
reflect the total amounts spent on gambling and all the winnings
or income as well as losses therefrom.
The law is clear that income from gambling is includable in
gross income. Sec. 61. Section 165(d) provides that "Losses
from wagering transactions shall be allowed only to the extent of
the gains from such transactions." Sec. 1.165-10, Income Tax
Regs. This Court, in Rodriguez v. Commissioner, T.C. Memo. 2001-
36, stated:
In order to establish entitlement to a deduction for
wagering losses in this Court, the taxpayer must prove that
he sustained such losses during the taxable year. See Mack
v. Commissioner, 429 F.2d 182 (6th Cir. 1970), affg. T.C.
Memo. 1969-26; Stein v. Commissioner, 322 F.2d 78 (5th Cir.
1963), affg. T.C. Memo. 1962-19. He must also prove that
the amount of such wagering losses claimed as a deduction
does not exceed the amount of the taxpayer's gains from
wagering transactions. See sec. 165(d). Implicitly, this
requires the taxpayer to prove both the amount of his losses
and the amount of his winnings. See Schooler v.
Commissioner, 68 T.C. 867, 869 (1977); Donovan v.
Commissioner, T.C. Memo. 1965-247, affd. per curiam 359 F.2d
64 (1st Cir. 1966). Otherwise, there can be no way of
knowing whether the sum of the losses claimed on the return
is greater or less than the taxpayer's winnings. * * *
Petitioners maintained no books and records to reflect their
winnings and losses from wagering and gambling activities. The
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