- 17 -
By notices of deficiency issued on February 19, 1993,
respondent disallowed all of petitioner's casualty loss deduction
and associated carrybacks and carryforward.
OPINION
A. Casualty Loss Deduction
1. Contentions of the Parties
Petitioner argues that she may deduct her losses from the
earthquake as a casualty loss. She contends that she offered
evidence showing the difference between the fair market values of
her home and personal property before and after the earthquake
and the adjusted bases of the property, and that respondent
offered no evidence that the earthquake did not cause the damage.
Respondent contends that petitioner has not proven that her
losses exceeded the amount of insurance proceeds she received, or
that the fair market value of the property was less after the
earthquake than before.
As discussed below, we conclude that petitioner’s losses
were greater than her insurance reimbursement but less than the
amount she deducted.
2. Eligibility for a Casualty Loss Deduction
Individuals generally may deduct losses to property caused
by casualties such as earthquakes. Sec. 165(c)(3). The loss
must exceed $100 and 10 percent of the individual’s adjusted
gross income. Sec. 165(h)(1) and (2)(A)(ii). Taxpayers may not
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011