- 4 - sufficient to establish the amount of his or her income and deductions. Sec. 6001. The first issue is whether petitioner failed to report wage income of $1,179 from his employment with K-Mart Corp. during 1992. The parties stipulated, and petitioner acknowledged at trial, that he received wages during 1992 from K-Mart Corp. in the amount of $1,179, which he failed to report on his income tax return. Petitioner testified that he failed to report such wages because he used these wages to replace an automobile that was stolen from him during December 1992. Section 61(a)(1) provides that "compensation for services" must be included in income. Petitioner presented no authority to support his position that the unreported wage income constituted an offset to any theft loss he sustained. The Court rejects petitioner's position that such income was offset by a theft loss.3 Consequently, the Court holds that the $1,179 wage income 3 Petitioner did not itemize deductions on his 1992 income tax return that he filed as head of household claiming the standard deduction of $5,250. The Court advised petitioner at trial that a theft loss is allowable under sec. 165(c)(3) only as an itemized deduction. However, based on petitioner's testimony, it is unlikely that petitioner could have obtained any tax benefit from a theft loss because his basis in the automobile was $1,500, and it is likely that the fair market value at the time of the theft would have been less than $1,500. Under sec. 165(h)(1) and (2), any loss by an individual from a casualty or theft shall be allowed only to the extent the amount of the loss from each casualty or theft exceeds $100 and only to the extent that the amount of the net casualty or theft losses for the year exceeds 10 percent of the taxpayer's adjusted gross income.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011