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$91,000 of these unreported gambling winnings, thus omitting (for
unexplained reasons) at least $53,645 of these unreported
gambling winnings. Respondent contends that since the $43,818.75
conceded gambling losses are less than the unreported gross
gambling winnings that were omitted from the notice of
deficiency, petitioners are entitled to no deduction for gambling
losses.6
Gross income includes all income from whatever source
derived, including gambling. Sec. 61; McClanahan v. United
States, 292 F.2d 630, 631-632 (5th Cir. 1961). In the case of a
taxpayer not engaged in the trade or business of gambling,
gambling losses are allowable as an itemized deduction, but only
to the extent of gains from such transactions. See sec. 165(d);
McClanahan v. United States, supra; Winkler v. United States, 230
F.2d 766 (1st Cir. 1956); Gajewski v. Commissioner, 84 T.C. 980
(1985).
Absent a statutory exception, petitioners generally bear the
burden of proving their entitlement to claimed deductions. Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). When
respondent raises a new matter, however, the burden of proof is
on him. Rule 142(a). Accordingly, respondent bears the burden
of establishing the amount of petitioners’ additional unreported
6 Respondent does not seek any increased deficiency based on
gambling winnings omitted from the notice of deficiency.
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