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If decedent was not worth much, what was decedent’s source for
the $7 million used in 2000 for his gambling activities? As
noted, decedent apparently owed the Nevada casinos only $70,000,
suggesting that decedent had access to millions of dollars to
either play the slot machines with cash or to pay off the casinos
to the extent the casinos allowed decedent to play the slot
machines on credit (over the $70,000 decedent owed the casinos).
In our opinion, neither the fact that decedent incurred
large gambling losses nor the fact that decedent filed for
bankruptcy establishes for decedent’s estate a negative net worth
on the date of death.
In 2000, decedent realized large gambling winnings and large
gambling losses, but he reported nominal wage income and had
significant cash on hand to use for the purchase of an
automobile. These facts suggest to us substantial assets, and we
believe respondent to have been reasonable in the request for
more specific information about decedent’s net worth, which
information has not been provided.
We commend trial counsel for negotiating a favorable
settlement with regard to decedent’s claimed gambling losses.
That favorable settlement or concession by respondent, however,
does not necessarily translate into an award of administrative
costs against respondent, even the relatively modest amount
sought herein. See Sokol v. Commissioner, 92 T.C. 760, 767
(1989).
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Last modified: May 25, 2011