- 33 - Petitioner contends that the estate is entitled to a theft loss deduction for the amount of "excess fees" paid from the estate's assets to Lynch and Reardon. To the contrary, respondent contends that petitioner failed to prove that Lynch and Reardon stole anything from the estate and has disallowed the claimed theft loss deduction. Petitioner bears the burden of proving that respondent's determinations are incorrect. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933); Estate of Gilford v. Commissioner, 88 T.C. 38, 51 (1987). The general rule is that deductions are strictly a matter of legislative grace, and a taxpayer has the burden of establishing entitlement to any deduction claimed on the return. New Colonial Ice Co. v. Helverinq, 292 U.S. 435, 440 (1934); Estate of Damon v. Commissioner, 49 T.C. 108, 118 (1967). The value of decedent's taxable estate equals the value of his or her gross estate less certain deductions. Sec. 2051. Section 2054 allows a deduction from the value of the gross estate for losses incurred during the settlement of the estate arising from fires, storms, shipwrecks, or other casualties, or from theft, when such losses are not compensated for by insurance or otherwise. In Estate of Shlensky v. Commissioner, T.C. Memo. 1977-148, this Court stated, regarding section 2054: While neither this section nor the applicable regulations define the term "theft," the section's language closely parallels section 165(c)(3), and underPage: Previous 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 Next
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