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gambling winnings from gross income. Section 165(d) permits a
deduction for gambling losses, but only to the extent of gambling
winnings.
Petitioner concedes that he “was paid” the amount of
gambling winnings reported by the various casinos. Petitioner’s
only argument is that he owes tax on only a portion of the
gambling winnings because he split them with his traveling
companion. As petitioner testified: “This lady friend of mine
and I were traveling * * * we went from one casino from another.
We figured out how much we could spend and so we’d spend that and
we’d share it [the winnings] * * * I just took the money and then
I gave it to her.” Petitioner did not identify by name the
person with whom he purportedly split his gambling winnings and
did not offer any proof that he split any of his gambling
winnings. Further, there is no evidence that a Form W-2G was
issued to petitioner’s companion, and petitioner testified that
his companion did not report any of the gambling winnings on her
2001 return.2 Given the lack of evidence to support petitioner’s
claim that he split the gambling winnings, we sustain
2 Since petitioner received Forms W-2G, we assume that
petitioner filled out a Form 5754, Statement by Person(s)
Receiving Gambling Winnings, upon winning slot machine jackpots
of $1,200 or more. A Form 5754 not only is used to identify the
winner of the jackpot, but it may be used to report that the
winnings are shared among a group of people. Given the
circumstances of this case, it seems reasonable to conclude that
petitioner did not report on the Form 5754 that he was splitting
the winnings among others.
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Last modified: May 25, 2011