Traci A. Tomko and Ronald R. Tomko - Page 5

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          transactions shall be allowed only to the extent of the gains               
          from such transactions.”  See also sec. 1.165-10, Income Tax                
          Regs.  Petitioners do not dispute that section 165(d) applies               
          here.                                                                       
               Respondent claims that petitioners’ records are insufficient           
          to establish that they incurred any losses.  To be sure,                    
          petitioners’ records leave something to be desired.  Section 6001           
          and the regulations thereunder require that taxpayers keep                  
          adequate records to substantiate their income and deductions.               
          When a taxpayer fails to keep adequate records, but a court is              
          convinced that deductible expenses were made, the Court “should             
          make as close an approximation as it can, bearing heavily if it             
          chooses upon the taxpayer whose inexactitude is of his own                  
          making.”  Cohan v. Commissioner, 39 F.2d 540, 544 (2d Cir. 1930).           
          In cases involving gambling losses, this Court has invoked the              
          Cohan rule when it is satisfied that a taxpayer has incurred some           
          gambling losses.  See Drews v. Commissioner, 25 T.C. 1354 (1956).           
               The total amount petitioners attribute to their gambling               
          activity is $46,542--$18,080 (Chase credit card), $19,800 (MBNA             
          credit card), and $8,662 (bank account debit card).  While this             
          amount may have cycled through the casinos and the financial                
          institution, we are not convinced that this amount represents               
          petitioners’ gambling losses.  According to their testimony,                
          their losses were computed by the amount of cash they had at the            






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