- 17 - the claimed NOL, petitioner has failed to provide any hint as to where the losses may have originated. Petitioner has failed to meet his burden of proof with respect to this issue. We, therefore, sustain respondent's determination. 2. Horse- and Dog-Breeding Activities (a) Casualty and Theft Losses in 1991 We now address whether petitioners are entitled to casualty and theft losses claimed for 1991, relating to the death of Since Gussie and the purported theft of a puppy. Section 165 provides that taxpayers may deduct certain losses, including losses resulting from casualty or theft, sustained during the taxable year and not compensated by insurance or otherwise. Sec. 165(a), (c)(3). A taxpayer may deduct a casualty loss in the year in which the loss is sustained and may deduct a theft loss in the year in which the loss is discovered. Sec. 165(a), (c)(3), (e). The amount of a casualty or theft loss is equal to the lesser of the fair market value or the adjusted cost basis of the property in question. Secs. 1.165-7(b) and 1.165-8(c), Income Tax Regs. Therefore, if a taxpayer fails to establish the cost or other basis of property underlying a claim for a casualty or theft loss deduction, no deduction is allowable. Zmuda v. Commissioner, 79 T.C. 714, 727 (1982), affd. 731 F.2d 1417 (9th Cir. 1984). 8(...continued) incurred the losses in question. Wilkinson v. Commissioner, 71 T.C. 633, 639 (1979).Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
Last modified: May 25, 2011