Barbara Ann Tudyman - Page 28

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          Respondent did not raise these criticisms when Hise testified at              
          trial and thus did not give Hise a chance to respond to them.                 
          Hise is a licensed general contractor.  He prepared a detailed                
          report on the condition of petitioner’s home.  His testimony                  
          appeared to be credible.  We accept Hise’s report as a fair                   
          representation of the condition of petitioner’s house before the              
               Respondent argues that the fact that petitioner lived in                 
          her home after the earthquake but did not repair the foundation               
          shows that she believed that the building was safe.  However,                 
          respondent has not shown or even argued that a house must be                  
          uninhabitable to lose value to the extent that petitioner                     
                    c.   Improvements to Petitioner’s Home                              
               A taxpayer must show that the repairs do not improve the                 
          property more than the damage suffered, and that the value of the             
          property after the repairs does not, as a result of the repairs,              
          exceed the value of the property immediately before the casualty.             
          Sec. 1.165-7(a)(2)(ii), Income Tax Regs.  Respondent points out               
          that some of petitioner's expenses were for improvements to her               
          home.  For example, petitioner installed marble tile worth a                  
          couple of hundred dollars more than the tile that was there                   
          previously, and she upgraded some fixtures and door hardware.                 

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Last modified: May 25, 2011