Stephen D. Ruddel - Page 4

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          been satisified under Florida law for the Police Department to              
          remain in possession of those items and to continue the                     
          forfeiture proceeding.  See Fla. Stat. Ann. sec. 932.703(1) (West           
          1985).  A final order of forfeiture was never entered in this               
          case because petitioner, through his attorney, negotiated an                
          agreement with the police enabling him to repurchase his property           
          for a price of $90,900.  After he repurchased the property,                 
          petitioner and the Police Department settled and dismissed the              
          matter.                                                                     
               On November 4, 1992, petitioner filed his 1987 Federal                 
          income tax return.  On his Schedule A, Itemized Deductions,                 
          petitioner claimed a charitable contribution deduction with                 
          respect to the amounts he paid to the Police Department.1                   
          Petitioner also claimed a $161,100 casualty loss for the items of           
          personal property seized by the police.  Petitioner also claimed,           
          a bad debt deduction of $176,500, which was based on alleged                
          loans to two individuals, Ashley Dunn (Mr. Dunn) and William                
          Crowl (Mr. Crowl).                                                          
                                       OPINION                                        



               1 Petitioner originally reported that he transferred                   
          $152,297 of Chrysler Corp. stock to the Police Department, as a             
          charitable contribution.  Petitioner, however, never transferred            
          any shares of Chrysler Corp. stock to the Police Department.                
          Instead, the Chrysler Corp. stock was sold, and the proceeds were           
          used to repurchase petitioner's personal property from the Police           
          Department for $90,900.                                                     




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