Desert Palace, Inc. v. Commissioner
United States Tax Court
Held: Receivables arising from the extension of credit for gambling purposes do not represent taxable income until collected. Petitioner's right to collect upon them is subject to the defense of the obligor that the receivables were incurred for gambling purposes.
1Opinion of the Court
OPINION
Irwin, Judge:
Respondent determined deficiencies in petitioner’s Federal income taxes as follows:
Year ended Deficiency
Apr. 30, 1967 $461,793.32
Apr. 30, 1968 1,194,270.15
Apr. 30, 1969 3,019,061.24
Sept. 30, 1969 1,898,022.12
6,573,146.83
The issues in this case have been severed and the one now presented for our decision is whether winnings from petitioner’s customers who gamble on credit must be recognized as income at the time the receivable arises, or subsequently, when it is paid.
If we hold that petitioner must immediately recognize as income winnings from customers who gamble on…
2Cases cited17 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- West Indies v. First Nat. Bank of NevadaNevada Supreme Court · 1950
- Herberger v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1952
- Barker v. MagruderCourt of Appeals for the D.C. Circuit · 1938
- Evans v. CookNevada Supreme Court · 1876
12 more not listed; retrieve them via the Exa API.
3Cited by7 opinions
- Flamingo Resort, Inc. v. United StatesCourt of Appeals for the Ninth Circuit · 1982
- Flamingo Resort, Inc. v. United StatesDistrict Court, D. Nevada · 1980
- Desert Palace, Inc. v. C. I. RCourt of Appeals for the Ninth Circuit · 1982
- Desert Palace, Inc. v. CommissionerUnited States Tax Court · 1979
- Hilton Hotels Corp. v. CommissionerUnited States Tax Court · 1983
2 more not listed; retrieve them via the Exa API.