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compensation of $1,024.2 Petitioner did not present any argument
that these amounts are not includable in income. The Court
therefore concludes that petitioner is required to include these
amounts in income.
While petitioner does not dispute that his gambling winnings
should be included in his income, he does assert that his
gambling winnings should be offset by his gambling losses.
Section 165(d) allows taxpayers to deduct losses from wagering
transactions to the extent of the gains from such transactions.
In order to establish entitlement to a deduction for
wagering losses in this Court, the taxpayer must prove the losses
sustained during the taxable year. 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. The taxpayer must also prove that the amount of
wagering losses claimed as a deduction does not exceed the amount
of the taxpayer's gains from wagering transactions. Sec. 165(d).
Implicitly, this requires the taxpayer to prove both the amount
of losses and the amount of winnings. Schooler v. Commissioner,
68 T.C. 867, 869 (1977); Donovan v. Commissioner, T.C. Memo.
2Pursuant to sec. 6211(b)(1), petitioner's withheld tax on
wages of $10,289 is not taken into consideration in determining
the deficiency. It is, however, applied in calculating the
amount required to be paid. Sec. 31(a)(1). The addition to tax
under sec. 6651(a) is calculated on the net amount of tax due.
Sec. 6651(b)(1).
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