Robert K. and Cheryl Hardwick - Page 10
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to the extent of gains from such transactions. See sec. 165(d);
McClanahan v. United States, supra at 632 n.1 (citing Winkler v.
United States, 230 F.2d 766 (1st Cir. 1956)).
Taxpayers have the burden of showing that they are entitled
to a gambling loss deduction. Norgaard v. Commissioner, 939 F.2d
874, 878 (9th Cir. 1991), affg. in part, revg. in part on another
ground T.C. Memo. 1989-390. Generally, a claimed expense (other
than those subjected to heightened scrutiny under section 274)
may be deductible even where the taxpayer is unable to fully
substantiate it, if there is an evidentiary basis for doing so.
Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930);
Vanicek v. Commissioner, 85 T.C. 731, 742-743 (1985); Sanford v.
Commissioner, 50 T.C. 823, 827-828 (1968), affd. per curiam 412
F.2d 201 (2d Cir. 1969); sec. 1.274-5T(a), Temporary Income Tax
Regs., 50 Fed. Reg. 46014 (Nov. 6, 1985). In these instances,
the Court is permitted to make as close an approximation of the
allowable expense as it can, bearing heavily against the taxpayer
whose inexactitude is of his or her own making. Cohan v.
Commissioner, supra at 544.
Petitioners rely on Doffin v. Commissioner, T.C. Memo. 1991-
114, in claiming that the Court should estimate their gambling
losses pursuant to the rule of Cohan. However, this Court has
declined to apply the rule of Cohan to gambling loss deduction
cases that differ factually from Doffin. See Donovan v.
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Last modified: March 27, 2008