Maria E. Magallon - Page 8

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          reproduced below, petitioner had net gambling losses of                     
          $28,183.15 in 2002.                                                         
               Gaming Area    Dollars In     Dollars Out    Win/Loss                  
               Pit            $75.00           -0-          ($75.00)                  
               Slot           686,611.23     $658,503.08     (28,108.15)              
               Totals         686,686.23     658,503.08     (28,183.15)               
               Petitioner agrees that the report is accurate to the extent            
          that it shows that she had net gambling losses of $28,183.15 in             
          2002.  Petitioner, however, argues that the report was                      
          “definitely incorrect” in showing that she gambled $686,686.23 in           
          2002.  For tax purposes, it is irrelevant whether petitioner                
          actually gambled $686,686.23 or some other amount in 2002 in                
          order to arrive at net gambling losses of $28,183.15.                       
               TCO Martin included petitioner’s excess gambling losses on             
          the expenses side of the “T” account because petitioner failed to           
          account for the income source that she used to pay for those                
          losses.  Unless petitioner can account for how she had paid for             
          her excess gambling losses in 2002, such losses were properly               
          included in the expenses side of the “T” account.                           
               Petitioner claims that she used her excess winnings from               
          2001 to pay for her excess gambling losses in 2002.  In support,            
          petitioner presented a Form 1040 for 2001 where she reported                
          winnings of $60,546 and claimed a gambling loss deduction of                
          $43,916, resulting in net winnings of $16,530.                              
               TCO Martin testified that he had reviewed bank statements              
          from all of petitioner’s known accounts.  The statements,                   

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