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Regulations was a zero ($0) and if he had been lost in
the same way, no deduction for the loss would have been
allowed under the interpretation that Respondent puts
forth, and therein lies the error. The unequivocal
intent of the tax code is equilibrium--to strike a
balance amongst taxpayers so that all may receive
fairest treatment and to be subject only to the fairest
amount of tax.
* * * * * * *
Horses are discrete in terms of casualty losses of
business property. Certainly the ilk of Since Gussie
is. It is incumbent upon the Commissioner to
discriminate, whether by adding another paragraph or
otherwise to this regulation and the Petitioners look
to this Court for a first step in that direction.
We reject petitioners' argument. Section 1.165-7(b), Income
Tax Regs., expressly and unambiguously provides that the
deductible casualty loss amount is the lesser of either the
asset's basis or its fair market value at the time of the
casualty. There exists no exception for casualties involving
race horses, and it is beyond our authority to fashion such an
exception. Furthermore, other than petitioner's oral testimony,
petitioners offered no evidence, such as receipts or bills of
sale, to prove their adjusted basis in Since Gussie. Petitioners
similarly offered no evidence concerning their basis in the puppy
that was purportedly stolen. Accordingly, we sustain
respondent's determination.
(b) Amortization of Startup Expenditures for 1991 and 1992
We now address whether petitioners are entitled to amortize
startup expenditures with respect to Arabian Hill. Section
195(a) provides that generally, taxpayers are not allowed to
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