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engagement. A sporadic activity, hobby, or an amusement
diversion does not qualify as a trade or business. Commissioner
v. Groetzinger, supra at 35. In sum, petitioner was not engaged
in the trade or business of gambling in 1998.
Turning to a wagering loss deduction, we are willing to
assume that petitioner lost more than she won. Section 165(d),
however, provides that “Losses from wagering transactions shall
be allowed only to the extent of the gains from such
transactions.” Petitioners claimed the standard deduction on
their 1998 Federal income tax return. The standard deduction
amount claimed on the return and allowed ($7,950) exceeds the
amount of the gambling losses ($4,500) that would be allowable,
and petitioners have not established that they had other itemized
deductions greater than $3,450, the difference between the amount
allowed and the loss. Accordingly, petitioners are not entitled
to a separate deduction for gambling losses. See Umstead v.
Commissioner, T.C. Memo. 1982-573; Carter v. Commissioner, T.C.
Memo. 1976-23. Respondent’s determination is sustained.
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect the foregoing,
Decision will be entered
for respondent.
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