Zarin v. Commissioner
United States Tax Court
P, a compulsive gambler, gambled on credit extended by a New Jersey casino. During the following year, P and the casino settled the debt at a substantial discount. Held, the difference between the face amount of the debt and the amount for which it was settled constitutes income from the discharge of indebtedness. Sec. 61(a)(12), I.R.C. 1954.
1DissentJacobs, J.
The majority concludes that petitioner David Zarin had income from discharge of gambling indebtedness in 1981. I would conclude otherwise.
The facts in this case are relatively simple. Petitioner was a compulsive gambler whose addiction Resorts fueled through the extension of credit. By April 1980, Resorts had advanced $3,435,000 to petitioner. Because petitioner had not repaid this amount, on November 18, 1980, Resorts instituted a State court proceeding seeking collection of the $3,435,000. On September 28, 1981, petitioner settled this claim by agreeing to pay Resorts $500,000, which he did.
2Cases cited4 opinions
- Commissioner v. DubersteinSupreme Court of the United States · 1960
- United States v. G. E. Hall and Christine B. Hall, G. E. Hall and Christine B. Hall, Cross-Appellants v. United States of America, Cross-AppelleeCourt of Appeals for the Tenth Circuit · 1962
- Resorts International Hotel, Inc. v. SalomoneNew Jersey Superior Court Appellate Division · 1981
- Nemtin v. ZarinDistrict Court, D. New Jersey · 1983