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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%).
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