Tax research assignment

Part I:

• Identify the Code Section and/or Regulation that informs your conclusions.

Part II:

Write a Research Memorandum presenting your findings. Use the Research Memorandum example on the attachment provided.

• -Statement of the facts. This is a brief statement of the facts similar to what we did in class.
• -Define the issue. Narrow down the issue you need to research and resolve.
• -State your conclusions based on your research
• -Identify the code section(s) and/or regulations that support your conclusions. Copy and paste the relevant section(s).

DeductionCase:

Larry is a professional gambler, specializing in dog racing. He spends 50 to 60 hours per week studying racing forms and placing bets at the track. During the current year, Larry has winnings of $240,000 on $380,000 of bets placed. He has no other business income. His wife, Jane, is employed as a university professor and earns $55,000 annually. They also have $15,000 in income from investments. Because Larry devotes all his time to his dog-racing activities, he feels that he should be able to deduct the loss he incurred in his ??business?? against their other income.

Read and analyze the following authorities to determine the deduction Larry is allowed for his dog-racing losses:

Sec. 162.

Sec. 165.

Commissioner v. Groetzinger, 480 U.S. 23 (1987).

Pete C. Valenti, 68 TCM 838 (1994).