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Petitioner timely filed a Federal income tax return for
1988. Petitioner properly elected under section 165(i) to claim
a loss deduction in the immediately preceding tax year. She
filed an amended 1988 return on April 9, 1990, to claim a
casualty loss of $290,262,1 for the damage caused by the
earthquake.
The Homeowners’ Association had made minimal repairs to
her home when she filed her amended 1988 return. Aetna denied
coverage under the Homeowners’ Association policy for the
earthquake damage to petitioner’s home on April 10, 1990.
Petitioner filed amended returns for 1985, 1986, and 1987 on
June 6, 1990. She carried back net operating losses of $250,661
to 1985, $208,242 to 1986, and $172,919 to 1987 from the unused
1988 casualty loss. She carried forward $121,814 of the unused
casualty loss to 1989.
Petitioner filed her 1989 return around April 15, 1990.
1 Petitioner calculated her casualty loss deduction as
follows:
Personal property damage $134,411
Real property damage 202,200
Subtotal 336,611
Less:
Insurance proceeds 42,000
Sec. 165(h)(1) limit 100
Sec. 165(h)(2) limit 4,247
46,347
Casualty loss 290,264
Petitioner deducted $290,262 as a casualty loss deduction.
There is no explanation in the record for the $2 discrepancy.
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