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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).
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