Robert K. and Cheryl Hardwick - Page 2

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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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