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Winnings Losses
Boomtown Casino $2,645 $1,690
Jubilation Casino 3,100 1,550
On their 1996 joint Federal income tax return, petitioners
reported no income or losses from their gambling activities.
They reported $104,000 wage income from Mega.
Respondent commenced an examination of petitioners’ 1996
joint Federal income tax return in December 1998. In the notice
of deficiency, issued in March 1999, respondent determined that
petitioners had $91,000 unreported gambling income. Respondent’s
determination was based on gambling winnings reported on 18 Forms
W-2G–-two from Jubilation Casino (showing $3,100 total gross
winnings), eight from the Bay St. Louis Casino Magic (showing
$61,000 total gross winnings), seven from the Biloxi Casino Magic
(showing $24,900 total gross winnings), and one from Boomtown
Casino (showing $2,000 total gross winnings).
OPINION
Petitioners contend that their 1996 gambling losses more
than offset their gambling winnings and that respondent’s
determination is therefore in error. Respondent concedes that
petitioners had $43,818.75 of gambling losses in 1996, based
largely on the THRs generated by the Casinos Magic with respect
to petitioners’ table games play. Respondent contends, however,
that petitioners had at least $144,645 of unreported gambling
winnings in 1996, and that the notice of deficiency reflects only
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Last modified: May 25, 2011