In Uncategorized on 07/15/2019 at 16:48

But the late great Vincent Thomas Lombardi was heard to say in response thereto, “It’s the only thing.” Now The Judge With a Heart, STJ Robt. N. Armen, isn’t quite so single-minded as the late great Vince, but Theodore James Zalesiak, 2019 T. C. Sum. Op. 16, filed 7/15/19, didn’t win, and didn’t play, often enough, to qualify as a pro in the poker stakes.

TJ did play the online game, and did play cash games and show-up tournaments, but never got on television. And he mostly worked as a construction manager in the Chicagoland area, although he did play when traveling (mostly to visit family on his accrued leave time from work), and whenever he got a break from construction managing.

My colleague Peter Reilly, CPA, would doubtless comb through the Section 183 factors for deductions from profit-making activity. STJ Armen does a quicker sweep.

“Petitioner testified at trial that engaging in poker-related activities consumed his nights and weekends for the year in issue.  But simply spending all of one’s free time on an activity does not transform the activity into a trade or business, nor does it make the participant a professional.  In addition, petitioner stopped engaging in poker-related activities for a substantial period during the year in issue because his job as a construction manager would not permit him to continue playing poker at that time.  He also took a trip… and played poker in various cities, but it was possible only because he accrued enough leave to do so; and, notably, he visited family and friends in those cities during the trip (i.e., he “was able to get two birds with one stone”).

“Most importantly, petitioner relied on his full-time employment to substantially support his pursuit of poker.  In [year at issue] petitioner’s wages constituted 98.1% of his total income. Without his wages as a construction manager he could not have paid his rent or otherwise have supported himself, nor could he have indulged his passion for poker.  Furthermore, he recognized the need for wage income, and he looked to employment, not poker, for his livelihood.  Petitioner’s reliance on employment for his livelihood is consistent with his characterization on his returns of his occupation as a ‘manager’.  Indeed, petitioner testified at trial that self-describing himself as a “manager” ‘was always something that I would tell people that I was doing if they would ask me on a professional level.’” 2019 T. C. Memo. 16, at pp. 12-13.

I expect Phil Hellmuth, Daniel Negreanu, and Phil Ivey would each use different nomenclature if asked what he does on a “professional” level. And spend a lot more time, and do a lot better, at the poker table.

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