- 13 -
conclude that the unreported gross income indicated by the notice
of deficiency is $86,705 ($91,000 less $4,295).
To recap, we conclude that the facts relied upon by
respondent show that petitioners had unreported gambling gross
income of $137,700. This amount is $50,995 greater than the
$86,705 unreported gambling gross income indicated by the
unreported gross gambling winnings reflected in the notice of
deficiency. To establish their entitlement to deduct gambling
losses from the gross gambling income indicated by the notice of
deficiency, petitioners must establish that their gambling losses
are greater than the $50,995 of unreported gross gambling income
that is not reflected in the notice of deficiency. See Schooler
v. Commissioner, 68 T.C. 867 (1977). Respondent has conceded
that petitioners have gambling losses of $43,818.75, based
largely on the THRs generated by the Casinos Magic with respect
to petitioners’ table games play. Accordingly, petitioners must
establish additional gambling losses of at least $7,176.25
($50,995 less $43,818.75) to show entitlement to any gambling
loss deduction.12
12 As discussed in more detail in the text, the $43,818.75
gambling losses that respondent has conceded represent primarily
losses reflected in THRs, relating to table games play at the
Casinos Magic. These conceded losses do not include petitioners’
costs of placing slot machine bets and hence do not duplicate the
amounts that we have concluded should be allowed as an offset in
determining petitioners’ gross income from slot machine winnings.
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011