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weather starts to break." Since the $396,000 asking price was
slightly below the PEDRO's $402,000 adjusted basis, and there
appears to have been considerable interest in the boat, there is
no reason to suppose petitioners could not have gotten their
asking price. But since they were willing to sell the PEDRO for
this amount, no higher fair market value figure was shown to be
appropriate. Since the adjusted basis of the PEDRO, $402,000,
was greater than the $396,000 fair market value immediately
before the casualty loss, the regulations require that the latter
figure be used.
Based on the record before us, we also find that the
$110,000 insurance recovery accurately measures the decrease in
the fair market value of the PEDRO as a result of the valve
explosion. Thus, the fair market value of the PEDRO immediately
after the February 7, 1989 explosion was $286,000. We recognize
that section 1.165-7(a)(ii), Income Tax Regs., provides that the
cost of repairs to the property damaged can be acceptable, under
certain circumstances, as evidence of the loss of value.
Petitioner testified that he spent "about $38,000 in repairs out
of my own pocket of things that they [USF&G] wouldn't pay for."
But petitioner neither specified the items he claims to have paid
for that were not reimbursed, nor supported his claim by any
receipts, checks, or other evidence that would, in an objective
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