George E. and Gloria Tschetschot - Page 2

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               Gloria Tschetschot, pro se.                                            
               J. Anthony Hoefer, for respondent.                                     

                       MEMORANDUM FINDINGS OF FACT AND OPINION                        

               ARMEN, Special Trial Judge:  Respondent determined a                   
          deficiency in petitioners’ Federal income tax for the taxable               
          year 2000 of $10,071, as well as an accuracy-related penalty for            
          a substantial understatement of income tax of $2,014.  The                  
          grounds for the deficiency were the limitations of section 165(d)           
          as applied to Gloria Tschetschot’s (Mrs. Tschetschot)                       
          professional tournament poker playing and George E. Tschetschot’s           
          (Mr. Tschetschot) status as a nonprofessional gambler.1  At                 
          trial, petitioners conceded that Mr. Tschetschot was not a                  
          professional gambler but argued that Mrs. Tschetschot’s                     
          professional tournament poker playing is not gambling and thus              
          not subject to the limitations of section 165(d) on losses from             
          gambling.  Respondent conceded that Mrs. Tschetschot’s business             
          expenses related to her professional gambling activity were                 
          deductible.  Thus, the two issues for decision are:  (1) Whether            
          Mrs. Tschetschot’s tournament poker losses are limited by section           
          165(d) to the amount of her tournament poker winnings, and (2)              



               1  Unless otherwise indicated, all section references are to           
          the Internal Revenue Code of 1986, as amended, and all Rule                 
          references are to the Tax Court Rules of Practice and Procedure.            




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