Question: Problem Case 1 : Charles visits Reno, Nevada, once each year to gamble. This year his gambling loss was $15,000. He commented to you, At

Problem Case 1: Charles visits Reno, Nevada, once each year to gamble. This year his gambling loss was $15,000. He commented to you, At least I did not have to pay for my airfare and hotel room. The casino paid that because I am such a good customer. That was worth at least $2,500. What are the relevant tax issues for Charles?

Problem Case 2: Determine the taxpayers gross income for tax purposes in each of the following situations: Dana, a cash basis taxpayer, sold a corporate bond with accrued interest of $200 for $10,500. Danas cost of the bond was $10,000.

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