- 5 - 1372 (9th Cir. 1985); Valenti v. Commissioner, T.C. Memo. 1994-483. The parties agree that petitioners were not professional gamblers and were not engaged in gambling as a trade or business activity. Therefore, the income and losses from the activity could not be reported on their return on Schedule C, Profit or Loss From Business. Petitioners’ gambling winnings, nevertheless, constituted gross income under section 61(a), and such income was required to be reported on Form 1040 of their income tax return. Petitioners did not report any of their gambling winnings on their income tax return. The deductions for losses attributable to the gambling activity were allowed by respondent (to the extent of the winnings) as an itemized deduction. Sec. 63(b) and (c); Stein v. Commissioner, T.C. Memo. 1984-403, affd. without published opinion 770 F.2d 1075 (3d Cir. 1985); Heidelberg v. Commissioner, T.C. Memo. 1977-133. As a consequence, respondent sustained the aforedescribed adjustments giving rise to the determined deficiency. Petitioners contend that itemized-deduction treatment of their gambling income and losses is unfair, and that they can simply ignore the winnings and the losses by not reporting the same on their return. They take strong issue with respondent’s determination that causes them to recognize a greater amount of their Social Security benefits as gross income and to lose the tax credit and the standard deduction, both of which arePage: Previous 1 2 3 4 5 6 7 Next
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