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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.
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