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the amounts used by petitioners in computing the amount of the
casualty loss on their 1990 return.
Petitioners argue generally in support of the position taken
on their return.
Section 165(a) provides a deduction for losses not
compensated for by insurance or otherwise. Section 165(h) deals
with the treatment of casualty gains and losses. Although
petitioner testified that he was in the business of buying and
selling boats, for which he held two franchises, and petitioners
included a Schedule C relating to boat sales with their 1990
return, they claimed the loss from the partial sinking of the
PEDRO as a loss from a casualty relating to personal use
property, for reasons not readily apparent, and reduced the loss
by $100, as provided by section 165(h)(1), and 10 percent of
their adjusted gross income, or $4,032, as provided by section
165(h)(4)(A).
As already noted, respondent challenges both the year in
which any casualty loss deduction may be claimed by petitioners,
and the amount of the loss. For reasons hereafter discussed, we
believe that petitioners have correctly chosen 1990 as the year
for which to claim any casualty loss, but, based on the record
before us, that petitioners are entitled to claim no casualty
loss in any year from the partial sinking of the PEDRO.
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