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P is a gambling casino operating in the State of Nevada. The casino, an accrual basis taxpayer, excluded 676,432.00 of casino receivables in its 1967 tax return. D required the accrual of these receivables and authorized an operating reserve fund for bad debts of $130,721. D assessed a tax deficiency in the amount of $ 261,942.65, plus interest. The receivables were uncollected loans extended by P in the course of its business. A customer would sign a 'marker' signifying his liability for the sum loaned. Sixty percent of P's total play resulted from such credit extensions. P was relentless in its collection efforts for receivables not repaid prior to the sucker's, we meant to say patron's, patron's departure. P estimates its collection success at 96%. The extension of credit and high incidence of payment occurred despite the fact that Nevada does not recognize the legal enforceability of gambling debts. P appealed from a summary judgment for D.

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