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Respondent determined a deficiency of $2,525 in petitioners’
Federal income tax for 2002.
The sole issue for decision is whether gambling winnings of
Janice G. Spencer (petitioner), who is not a professional
gambler, are required to be reported as gross income, or whether
the winnings may be offset by the losses that were incurred in
connection with the gambling activity.
Some of the facts were stipulated. Those facts, with the
exhibits annexed thereto, are so found and made part hereof.
Petitioners, husband and wife, were legal residents of
Independence, Missouri, at the time they filed their petition.
Petitioners filed a joint Federal income tax return for
2002. On their Form 1040, U.S. Individual Income Tax Return,
they reported wage and salary income of $30,314, of which
$24,717.64 was earned by petitioner Janice G. Spencer, and
$5,595.86 was earned by her spouse, Fred E. Egerton (Mr.
Egerton). Petitioners also reported Social Security income of
$7,728, of which the reported taxable portion was $1,089.
Petitioners claimed a $395 tax credit pursuant to Form 8880,
Credit for Qualified Retirement Savings Contributions.2
Petitioners did not claim any itemized deductions and
instead claimed the standard deduction under section 63.
2The Social Security income and the retirement savings
contributions credit are believed to be attributable to
petitioner Fred E. Egerton.
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