Jimmie L. Clemons - Page 7

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               Section 61(a) defines gross income as “all income from                 
          whatever source derived,” including gambling, unless otherwise              
          provided.  McClanahan v. United States, 292 F.2d 630, 631-632               
          (5th Cir. 1961).  The Supreme Court has consistently given this             
          definition of gross income a liberal construction “in recognition           
          of the intention of Congress to tax all gains except those                  
          specifically exempted.”  Commissioner v. Glenshaw Glass Co., 348            
          U.S. 426, 430 (1955); see also Roemer v. Commissioner, 716 F.2d             
          693, 696 (9th Cir. 1983) (all realized accessions to wealth are             
          presumed taxable income, unless the taxpayer can demonstrate that           
          an acquisition is specifically exempted from taxation), revg. 79            
          T.C. 398 (1982).                                                            
               Section 62 defines adjusted gross income and allows expenses           
          of a trade or business and certain employee business expenses to            
          be deducted from gross income.  These deductions are sometimes              
          referred to as deductions “above the line,” meaning simply that             
          they are deducted from gross income to arrive at “adjusted gross            
          income.”  Gamblers who are engaged in a trade or business of                
          gambling may be able to deduct their gambling losses above the              
          line; indeed, courts have based their decisions in some cases on            
          the proposition that such a professional gambler may net losses             
          against winnings for purposes of determining what is includable             
          in gross income.  See Winkler v. United States, 230 F.2d 766 (1st           







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