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petitioners,1 the issue for decision is whether petitioners are
entitled to deduct gambling losses in excess of the $170,215 that
respondent allowed for their 2002 taxable year.2
FINDINGS OF FACT
Some of the facts have been stipulated by the parties. The
stipulations, with accompanying exhibits, are incorporated herein
by this reference. At the time the petition was filed,
petitioners resided in Birmingham, Alabama.
Robert K. Hardwick (Mr. Hardwick) is president and part
owner of Hardwick Company, Inc. (Hardwick Co.), which is a heavy
steel fabricating company. Petitioners are recreational gamblers
and began playing slot machines regularly in 1997. In 2002, they
made at least eight trips to Mississippi to play slot machines at
various casinos. Mr. Hardwick normally played the high stakes
slots ($20 or $30 per pull).
Petitioners had a line of credit at the casinos they visited
regularly in Tunica and Biloxi, Mississippi, of approximately
1Petitioners concede that the $12,400 they won in 2003 at
the Pearl River Resort casino was not properly includable in
their taxable income for taxable year 2002. Petitioners concede
that the $26,500 that they won from the Beau Rivage Resorts,
Inc., casino in 2002 was properly includable in their 2002
taxable income. Petitioners concede that the net increase in
their taxable income for 2002 was $14,100.
2Unless otherwise indicated, all section references are to
the Internal Revenue Code of 1986, as amended and in effect for
the year in issue, and all Rule references are to the Tax Court
Rules of Practice and Procedure.
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