Whitten v. Commissioner T.C. Memo

1995-508

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Nature of the Case

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Facts

P are husband and wife who filed a joint Federal income tax return for 1991. At the time that their petition was filed in this case, petitioners resided in Northbrook, Illinois. P is a criminal investigator with the United States Securities and Exchange Commission and a nationally recognized cruciverbalist who has constructed crossword puzzles that have appeared in newspapers and magazines throughout the United States. P applied for and received an invitation to compete to be a contestant on 'Wheel of Fortune.' P was one of approximately 30 applicants who were selected to appear on the program. P was contacted by the 'Wheel of Fortune' game show, and arrangements were made for P to take part in the taping of the program to be conducted in Los Angeles, California, on February 8, 1991. In anticipation of his appearance on the program, petitioner watched 'Wheel of Fortune' nearly every night and acquired both a computerized and manual version of the game with which to practice. 'Wheel of Fortune' films 8 shows in one day, contestants are required to bring additional changes of clothing so that the winner of one show can reappear on the next show in a different outfit and thereby simulate different days. Contestants who win three games in a row are not permitted to return for a fourth show. P, as well as his wife and three of his children, flew to Los Angeles on February 7, 1991, and P appeared for the taping of 'Wheel of Fortune' as scheduled. P won three consecutive games and was awarded cash prizes in the total amount of $14,850 and a 1991 Chevrolet Geo Tracker automobile. Ps filed a joint 1991 Federal income tax return (Form 1040). P's winnings were reported as 'other income' on line 22 of Form 1040 in the amount of $19,830. This represented the winnings reduced by the expenses that P and his family purportedly incurred, namely $1,820, for transportation, meals, and lodging in order to participate as a contestant on the show in Los Angeles. Ps contend that the foregoing expenses represent 'gambling losses' that may be offset directly against petitioner's 'gambling winnings' from the program. D determined a deficiency in the amount of $582. D contends that the costs P purportedly incurred in attending and participating in the game show are properly characterized either as nondeductible personal expenses under section 262 or as miscellaneous itemized deductions that may only be deducted subject to the 2-percent floor prescribed by section 67(b).