Estate of Graciano V. Espinoza, Deceased, Elvira Expinoza, Executrix - Page 2

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               Unless otherwise indicated, all section references are to              
          the Internal Revenue Code, and all Rule references are to the Tax           
          Court Rules of Practice and Procedure.                                      

          Background                                                                  
               Graciano V. Espinoza (decedent) died on January 12, 2002,              
          survived by his wife Elvira, decedent’s executrix herein, and               
          other unnamed relatives.                                                    
               During 2000 and in prior years, decedent was addicted to               
          slot machine gambling.  Decedent’s gambling activities occurred             
          at casinos in Reno, Nevada.                                                 
               During 2000, decedent put a total of approximately $7                  
          million into slot machines at the Nevada casinos via either cash            
          or casino credit card, and decedent won 526 tax-reportable                  
          jackpots paying decedent total winnings of $2,580,200 with an               
          average jackpot of approximately $5,000.  Also during 2000,                 
          decedent won other nonjackpot or “hand-paid” winnings.                      
               During 2000, decedent purchased an automobile with $10,000             
          in cash (in 100 $100 bills).                                                
               In early 2001, the Nevada casinos at which decedent gambled            
          mailed to respondent numerous Forms W-2G, Certain Gambling                  
          Winnings, for 2000, the cumulative total of which reflected                 
          decedent’s $2,580,200 in slot machine jackpots.                             
               The above Forms W-2G did not include decedent’s other “non-            
          jackpot” slot machine winnings and did not reflect decedent’s               
          gambling losses.                                                            



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Last modified: May 25, 2011