Irving Nitzberg and Ida Nitzberg, and Sid Miller and Helen Miller v. Commissioner of Internal Revenue

RUSSELL E. SMITH, District Judge:

This appeal from the decisions of the Tax Court in consolidated cases poses the problem of whether certain losses incurred in connection with the operation of gaming tables are to be treated as “ordinary and necessary expenses,” deductible under 26 U.S.C. § 162(a), or as “losses from wagering transactions,” deductible only to the extent of gains, under 26 U.S.C. § 165(d).

The facts were stipulated, and from the stipulation it appears that appellants operated the Avalon Club (Club) which rented tables at which patrons for a fee could play lo-ball draw (a…