Barbara Ann Tudyman - Page 32

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               As discussed at paragraph A-2 above (p. 17), petitioner                  
          must prove her adjusted basis in property for which she claims                
          a casualty loss.  A taxpayer who acquires property by gift takes              
          a basis in the property equal to the lesser of the donor's basis              
          or the fair market value at the time of the gift.  Sec. 1015.  A              
          taxpayer who inherits property takes a basis in the property                  
          equal to its fair market value at the date of the decedent's                  
          death.  Sec. 1014(a).  Petitioner did not establish the basis she             
          had in property that she received by gift or inheritance.  For                
          example, she did not show that the fair market value she provided             
          was determined at the time of the earthquake or at the time of                
          her aunt's death.  She said that the chandelier, which she valued             
          at $14,500, was not listed as an asset in her aunt's estate tax               
          return.  Petitioner did not show what her basis is for these                  
               Petitioner’s personal property was damaged by the                        
          earthquake, but we think she overestimated the amount of damage.              
          We conclude that petitioner had personal property loss of                     
               5.   Insurance Payment                                                   
               We conclude that the decrease in fair market value of                    
          petitioner’s home due to the earthquake exceeded her insurance                
               Petitioner received $42,000 ($30,000 plus $12,000) as                    
          insurance reimbursement, the maximum allowed under her policy.                

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Last modified: May 25, 2011