- 13 - however, argues that petitioners have not proved that the amount of the loss sustained exceeds the deduction limitations set forth in section 165(h). Section 165(h)(1) provides that any casualty loss deduction of an individual is allowed only to the extent that the amount of the loss arising from each casualty exceeds $100. Section 165(h)(2) further limits the deduction to the amount that the aggregate of the losses for the taxable year, in excess of the section 165(h)(1) limitation of $100 per casualty, exceeds 10 percent of the individual's adjusted gross income for the taxable year. For purposes of section 165(h), a husband and wife making a joint return are treated as one individual. Sec. 165(h)(4)(B). Petitioners' adjusted gross income for 1992 is $80,170.5 Therefore, petitioners are entitled to a casualty loss deduction to the extent they prove that the amount of the loss exceeds $8,117.6 The proper measure of the amount of the loss sustained is the difference between the fair market value of the property immediately before and after the casualty, not to exceed its adjusted basis. Helvering v. Owens, 305 U.S. 468, 471 (1939); 5 This amount includes: (1) Adjusted gross income in the amount of $80,118 as reported by petitioners on their 1992 return; and (2) unreported interest income in the amount of $52 as conceded by petitioners. 6 This amount includes: (1) The section 165(h)(1) limitation of $100, and (2) the section 165(h)(2) limitation of $8,017 ($80,170 x 10%).Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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