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gains from such transactions.” See also sec. 1.165-10, Income
Tax Regs. Although petitioner deducted gambling losses exceeding
his gambling winnings by $50,650, petitioner does not dispute
that section 165(d) limits his gambling loss deduction to the
amount of his gambling winnings.
To be engaged in a trade or business within the meaning of
section 162(a), an individual taxpayer must be involved in the
activity with continuity, regularity, and with the primary
purpose of deriving income and profit. Commissioner v.
Groetzinger, 480 U.S. 23, 35 (1987). Whether the taxpayer is
carrying on a trade or business requires an examination of all
the facts in each case. Id. at 36; Higgins v. Commissioner, 312
U.S. 212, 217 (1941).
In Groetzinger, the Supreme Court addressed the issue of
whether a taxpayer’s gambling activity was a trade or business
within the meaning of section 162(a). The taxpayer devoted 60 to
80 hours each week for 48 weeks to parimutuel wagering, primarily
on greyhound races. Commissioner v. Groetzinger, supra at 24.
The taxpayer gambled at racetracks 6 days a week and spent a
substantial amount of time studying racing forms, programs, and
other materials. Id. While the taxpayer received $6,498 in
income from other sources during the year, the taxpayer had no
other profession or type of employment during the 48 weeks he
devoted to gambling. Id. at 24-25. The Supreme Court stated:
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