- 2 - Respondent determined a deficiency of $13,170 in petitioners’ 2001 Federal income tax. The issue is whether petitioners are entitled to deduct certain gambling losses. Petitioners resided in Oneida, Wisconsin, when the petition in this case was filed. Background The facts may be summarized as follows. During 2001, petitioners were recreational gamblers who played slot machines. Petitioners had winnings of at least $44,464 from these activities that were reported to the Internal Revenue Service. See sec. 7.6041-1, Temporary Proced. & Admin. Regs., 42 Fed. Reg. 1471 (Jan. 7, 1977). On their joint 2001 Form 1040, U.S. Individual Income Tax Return, petitioners reported gambling income of $21,100 and gambling losses of the same amount on Schedule A, Itemized Deductions. Respondent determined that petitioners received gambling income of $44,464 and disallowed the deduction for gambling losses on the ground that petitioners failed to substantiate any losses. Petitioners do not dispute the increase in gambling income. Petitioners, however, argue that they have substantiated their losses. They claim that the funds for each trip to the local casinos is shown by cash withdrawals on credit cards or bank account debit cards. Their statements from these accounts show activities at the casinos. In addition, they reconstructed theirPage: Previous 1 2 3 4 5 6 Next
Last modified: May 25, 2011