Barbara Ann Tudyman - Page 13

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               Petitioner inventoried and estimated the value of her                    
          damaged personal property shortly after the earthquake.                       
          Petitioner’s accountant, Robert Kern, gave her an Internal                    
          Revenue Service worksheet to complete before he prepared her                  
          amended 1988 return.  On the worksheet, petitioner estimated the              
          cost and fair market value of her damaged personal property                   
          items.  She spent 50 to 100 hours researching the cost and fair               
          market value of the damaged items.  She called stores to get the              
          cost of items for which she did not have receipts.                            
               The earthquake destroyed some of petitioner’s personal                   
          property, such as mirrors, statues, vases, and figurines.  It                 
          damaged other items such as bookcases, tables, chairs, a                      
          grandfather clock, rugs, and appliances.  Petitioner had to have              
          some of the damaged items repaired.  For example, petitioner had              
          the buffet server, table, and chairs repaired.                                
               Petitioner asked an appraiser, Mervyn Cohn (Cohn), to verify             
          the cost and fair market value of the damaged items.  He checked              
          price guides, called retailers, and concluded that petitioner’s               
          estimates were reasonable.  He discounted the pre-earthquake cost             
          or fair market value by 40 percent.  He estimated that the value              
          of petitioner's personal property was $86,398 before the                      
          earthquake.  He assumed that the personal property listed by                  
          petitioner as damaged by the earthquake had no salvage value.                 
          He did not separately estimate the salvage value of each item.                

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Last modified: May 25, 2011