INCOME DEDUCTIONS: ILLEGAL GAMBLING OPERATION:
01.Core Concepts
EXAMPLE Edna runs an illegal gambling operation in the back room of her meat packing firm. Edna received $750,000 in gross receipts from the gambling operation. The pro rata portion of rent Edna paid for the space used for the gambling operation was $40,000. Edna paid her employees $250,000 to run the operation, and incurred $20,000 in product costs (cards, chips, dice, etc.). Edna’s income from the gambling operation is $440,000 ($750,000 in gross receipts less $250,000 in salaries, $40,000 for rent, and $20,000 for product costs).