OPINION.
Tietjens, Judge:The only error assigned by the petitioners is the correctness of the respondent’s determination that during 1949 each had additional and unreported income of $11,281.83 from wagering operations. The'petitioners state that no income was reported from the business of booking bets during 1949 because the yearly total of the daily and weekly net.gains was $22,908.88, the total of the daily and weekly net losses was $23,489.97, and the difference, $581.09, represented the net loss sustained during the year in the conduct of that business. They also urge that since the respondent accepted Exhibit 3 as to the gains shown thereon, he also should have accepted it as correctly reflecting the losses indicated thereon. The respondent' contends that the records maintained by the petitioner for his wagering business, unlike those maintained for his other business activities and interests, are so meager as not to be susceptible of audit or verification ; that he was unable to determine whether losses were sustained as indicated on Exhibit 3; and that on the showing here made none of the amounts shown as losses on that exhibit should be allowed.
In effect the petitioners are contending for the allowance here of wagering losses to the extent of the gains determined by the respondent from that business. The pertinent portion of the Internal Revenue Code of 1939 is set out below.1
As we see it, the question resolves itself into one of fact, and we think it should properly be decided on the basis of the weight to be given to the evidence adduced. Cf. H. T. Rainwater, 23 T. C. 450. With that in mind, our finding of fact is dispositive of the issue — the total net gains of $22,908.88 as determined and accepted by the respondent should be subject to a further deduction of $3,000. '
We do not think , the petitioners can properly complain, as they have, that the respondent, on the one hand, accepted the net gains as disclosed by Exhibit 3, but on the other hand, disallowed as a deduction the net loss figures disclosed by the same exhibit. After all, the respondent’s acceptance of the net gains was tantamount to an allowance of the undisclosed loss figures which were utilized by the petitioners in computing their net gains, so that as a matter of fact the respondent has not disallowed in toto the petitioners’ losses. These gain figures, in a sense, were admissions against interest by the petitioners and so were more reliable than the bare “Loss” figures carried in the other monthly columns on the exhibit.
The reliability of Exhibit 3, however, so far as the loss figures are concerned is more vulnerable. The basic records of which that exhibit is a summary were not available and the totals shown are notsubject to accurate verification or audit. The acceptability of the exhibit as proof depends to a large extent on the oral testimony of the petitioner and of Walsh who assisted in its preparation. But such testimony was at best self-serving with respect to the petitioner and Walsh had no firsthand knowledge of the accuracy of the figures read off to him by the petitioner from his slips. Accordingly, we cannot accept the evidence as conclusively proving the full amount of the claimed losses. However, on the basis of that testimony and the other evidence of record, and bearing heavily on the petitioner whose failure to keep reliable records gives rise to the present controversy, we think an additional $3,000 deduction for wagering losses should be allowed.
Reviewed by the Court.
Decisions will be entered under Bule 50.
SBC. 23. DEDUCTIONS FROM GROSS INCOME.
In computing net income there shall be allowed as deductions:
* * * * - * * •
(h) Wagebing Losses. — Losses from wagering transactions shall be allowed only- to the extent of the gains from such transactions.