United States Tax Court

“ Petitioner's system required buying a large number of tickets on each race, and petitioner would often occupy a sales window the entire time between races to buy his tickets. He often bought so many tickets on one race that he could not hold them all. Petitioner's system for betting on the twin-quinellas and tri-fectas also guaranteed that he would buy a large number of losing tickets at $2 per ticket.
Approximately 15 percent of the total amounts wagered at the Colorado dog racing tracks is withdrawn off the top by the race track ”

“ As time went on petitioner spent more time at the race tracks and studying racing forms and less time in his law office, although his personal injury law practice did grow. While petitioner had very few assets and lived quite frugally, he became a chronic attendee and bettor at the race tracks. He made an effort to attend every dog racing program at each of the four dog tracks in the Denver area which scheduled their meetings to run consecutively with no overlap. Each of the four Colorado tracks is open approximately 71 nights per year. ”

“ In light of petitioner's knowledge of the dogs he bet on and the race tracks on which they ran, the time he spent each day studying the racing forms and watching the dogs run, the type of races he bet on, and the system he used to be relatively sure of a winner in many of the races he bet on, and his consistency in attending the races and betting on them almost every day the tracks were open, and keeping in mind that he testified he came out ahead on the races in 1979, 1981, and 1982, we believe petitioner won on the races in both of the years 1979 and 1980. ”

“ He did not entertain except for people at the tracks whom he thought might be helpful. He did not keep much money in banks or elsewhere, and his net worth was quite small or negative at times. A check spread analysis does not show large, unexplained movements of money, nor did the evidence suggest that petitioner had large hordes of cash.
Petitioner has apparently been more successful in gambling on the dog races in years subsequent to 1980 and was still spending most of his time in that activity at the time of trial. ”

“ However, the correct figure was apparently used in determining net business income and adjusted gross income reported.
5. To win a quinella a bettor must select the dogs which come in first and second but the order does not matter.
6. To win a twin-quinella a bettor must select two dogs out of eight dogs racing in two consecutive races that will finish first or second in either order. The bettor must win the first race to qualify to bet on the second race.
7. To win a tri-fecta the bettor must pick the first three finishers out of eight dogs racing in the exact order of finish. ”

“ That test was stated to be "The proper test of whether an individual is carrying on a trade or business requires an examination of all the facts involved in each case." In reversing and remanding this Court in Gajewski v. Commissioner, supra, the Second Circuit adopted a different test which is that in order to be engaged in a trade or business, "a taxpayer must, as a minimum have held himself out to others as offering goods or services."8 With due respect to the Second Circuit, we adhere to the test we first espoused in Ditunno v. ”