Ali and Arlene Mohammadpour - Page 7

                                        - 6 -                                         
          does not qualify.  Id. at 35.  Resolution of the issue of whether           
          gambling activity constitutes a trade or business requires an               
          examination of the facts in each case.  Id. at 36; Higgins v.               
          Commissioner, 312 U.S. 212, 217 (1941).                                     
               The taxpayer in Groetzinger pursued his gambling activity              
          full time, attending the racetrack 6 days a week for 48 weeks (or           
          288 days) during the tax year in question and devoting 60 to 80             
          hours each week to gambling-related endeavors.  He had no                   
          profession or type of employment (other than gambling) during the           
          48-week period and kept detailed records of his daily winnings              
          and losses.                                                                 
               Mr. Mohammadpour, in contrast, dedicated approximately 900             
          hours to his gambling activity in 2003 (or approximately 17 hours           
          per week on average), which appear to have been distributed over            
          136 days.  Petitioners reported no net income from Mr.                      
          Mohammadpour’s gambling activity on their return for 2001, 2002,            
          2003 (the year in issue), or 2004 but reported substantial                  
          amounts of wage income and net profit from Mr. Mohammadpour’s               
          accounting services business over that period.  It is evident,              
          and Mr. Mohammadpour admitted, that petitioners relied on other             
          sources of income for their livelihood for 2003 as in other                 

               6Cf. Barrish v. Commissioner, T.C. Memo. 1984-602, in which            
          the taxpayer, listing his occupation on his returns as                      

Page:  Previous  1  2  3  4  5  6  7  8  9  Next 

Last modified: November 10, 2007