Gary L. Lonsinger and Nancy L. Lonsinger - Page 11

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          manner, support his claim.  We cannot, therefore, allow the                 
          $38,000 as a deductible casualty loss.                                      
               We need not address respondent's argument that 1994, and not           
          1990, was the proper year in which petitioners could claim a                
          casualty loss deduction.  Respondent makes this argument because            
          1994 was the year in which petitioners settled their claim                  
          against Pedro-Holland for $30,000.  We would simply point out               
          that this recovery had no bearing on the computation of the                 
          amount of any unreimbursed loss suffered by petitioners.                    
               As a final word, we would note that with regard to 1994,               
          petitioners' accountant, Charles C. Brewster, testified that in             
          computing the tax consequences of petitioners' ultimate                     
          disposition of the PEDRO in 1994, he subtracted from basis the              
          $100,000 casualty loss taken on the 1990 return.  Since we have             
          sustained respondent's disallowance of this deduction,                      
          petitioners may be in position to recompute to their advantage              
          the tax consequences of the sale of the PEDRO.                              
               To reflect the foregoing and concessions by respondent,                

                                             Decision will be entered under           
                                        Rule 155.                                     











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