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

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U.S. Supreme Court

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

Commissioner of Internal Revenue v. Groetzinger

No. 86-1226

Argued Dec. 8, 1986

Decided Feb. 24, 1987

480 U.S. 23


For most of 1978, respondent devoted 60 to 80 hours per week to parimutuel wagering on dog races with a view to earning a living from such activity, had no other employment, and gambled solely for his own account. His efforts generated gross winnings of $70,000 on bets of $72,032, for a net gambling loss for the year of $2,032. Although he reported this loss on his 1978 tax return, he did not utilize it in computing his adjusted gross income or claim it as a deduction. Upon audit, the Commissioner of Internal Revenue determined that, under the Internal Revenue Code of 1964 (Code) as it existed in 1978, respondent was subject to a minimum tax because part of the gambling loss deduction to which he was entitled was an "ite[m] of tax preference." Under the Code, such items could be lessened by certain deductions that were "attributable to a trade or business carried on by the taxpayer." In redetermining respondent's tax deficiency, the Tax Court held that he was in the "trade or business" of gambling, so that no part of his gambling losses was an item of tax preference subjecting him to a minimum tax for 1978. The Court of Appeals affirmed.

Held: A full-time gambler who makes wagers solely for his own account is engaged in a "trade or business" within the meaning of Code §§162(a) and 62(1). Pp. 480 U. S. 27-36.

771 F.2d 269, affirmed.

BLACKMUN, J., delivered the opinion of the Court, in which BRENNAN, MARSHALL, POWELL, STEVENS, and O'CONNOR, JJ., joined. WHITE, J., filed a dissenting opinion, in which REHNQUIST, C. J., and SCALIA, J., joined, post, p. 480 U. S. 37.

Page 480 U. S. 24

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