Robert K. and Cheryl Hardwick - Page 5

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               Notably, there was at least one occasion where Mr. Hardwick            
          failed to include petitioners’ gambling winnings in his log.                
          Mr. Hardwick testified that he won $24,000 on Sunday, June 9,               
          2002, at the Grand Casino Tunica, yet his log does not include a            
          notation for this win.  Also, it appears that Mr. Hardwick may              
          have carried over to the 2002 taxable year a net $50,580 gambling           
          loss from 2001.5  Taking into account this possible carryover, it           
          appears, although the odds of winning on a casino’s slot machines           
          after a large number of plays is statistically improbable, that             
          based on Mr. Hardwick’s log, petitioners may have had net                   
          gambling winnings for 2002.6                                                

          believes the numbers total $36,030 (based on a $50,530 loss for             
          2001 instead of the $50,580 as calculated by Mr. Hardwick).  See            
          supra note 3.  The record does not explain how petitioner got               
          from his apparent $35,580 total, shown as log entry No. 14, to              
          ($31,180), the total for 2002 shown as log entry No. 16.                    
               5The fourth notation for 2002 is “76480” and/or “74580” (log           
          entry No. 5) which according to Mr. Hardwick’s testimony is a               
          “running total”.  Although there is no indication that the                  
          $76,480/$74,580 dollar amount is a net loss, it appears to be               
          consistent with the rest of the document.  According to                     
          Mr. Hardwick’s notations, his yellow notebook log sheet reflects            
          that petitioners had a net gambling loss of $50,580 for 2001 (see           
          log entry No. 1).  Taking into account petitioners’ $19,000                 
          winnings (log entry No. 2), $18,000 loss (log entry No. 3), and             
          $25,000 loss in Feb. 2002 (log entry No. 4), the $76,480/$74,580            
          “running total” incorporates petitioners’ $50,580 loss from 2001.           
          The next “running total” listed is “-50580” and/or “50080” (log             
          entry No. 10), which appears to be an approximate result after              
          taking into consideration a $1,100 loss (log entry No. 6),                  
          winnings of $14,000 (log entry No. 7), and tax refunds of $8,800            
          and $2,300 (log entries No. 8 and No. 9).                                   
               6The Court notes that according to Mr. Hardwick’s notations            

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