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unrelated to their gambling activity. Petitioners also argue
that, if their gambling winnings have to be reported as income on
their tax return, then the losses should be allowed as deductions
on the Form 1040, or “above the line”. The Court rejects that
argument because to treat the income and losses in that fashion
would effectively remove any distinction between a professional
gambler and a nonprofessional gambler. Petitioners are in that
latter category, and their only entitlement to the deduction for
their gambling losses is the manner in which respondent
determined it as an itemized deduction. Petitioners have cited
no authority, and indeed there is no authority to support their
argument that unrelated income and credits are immune from the
effects of the manner in which respondent treated their gambling
winnings and losses. The Court, therefore, sustains respondent.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
for respondent.
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