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OPINION
Claimed Gambling Losses
At trial, respondent conceded that petitioners incurred
gambling losses of $76,314 and $55,750 during 1999 and 2000,
respectively, and that they are entitled to deduct such losses
for those respective years. We must decide whether petitioners
are entitled for each of the years at issue to deduct gambling
losses in excess of the deduction allowed by respondent for each
such year.
Section 165(d) permits a taxpayer to deduct losses from
wagering transactions to the extent of the winnings from such
transactions. The taxpayer bears the burden of proving entitle-
ment to such a deduction. Schooler v. Commissioner, 68 T.C. 867,
869 (1977). Moreover, deductions are a matter of legislative
grace, and the taxpayer bears the burden of proving entitlement
to any deduction claimed. INDOPCO, Inc. v. Commissioner, 503
U.S. 79, 84 (1992). A taxpayer is required to maintain records
sufficient to establish the amount of any deduction claimed.
Sec. 6001; sec. 1.6001-1(a), Income Tax Regs.
It is petitioners’ position that the burden of proof with
respect to the claimed gambling loss deductions at issue has
shifted to respondent under section 7491(a). That is because,
according to petitioners, they “introduced credible evidence that
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Last modified: May 25, 2011