10- -
Soon after the February flood, Rod Parker, an insurance
adjuster for ABIC, visited petitioners' home to survey the damage
and determine the insurance reimbursement to which they were
entitled. He calculated the full cost to repair the home as
$26,168.17 and the replacement cost of the contents, less
depreciation and salvage value, as $53,779.50. Based upon Mr.
Parker's report, petitioners received total insurance
reimbursement from ABIC of $79,978.11, consisting of $26,698.61
reimbursement for damage to the home and $53,279.50 reimbursement
for damage to its contents.
In addition, petitioners received two checks, one for the
damage to their home and one for the damage to its contents, in
undisclosed amounts and from an undisclosed insurance company, as
reimbursement for the damage caused by the February flood.
Petitioners claimed a casualty loss deduction in the amount
of $176,896 on Schedule A of their 1991 income tax return. The
individual casualty losses they claimed were detailed on Form
4684 attached to the return. Among the losses claimed was a loss
in the amount of $156,778.20, before insurance reimbursement, for
flood damage to their home on February 18, 1991. Worksheets
prepared by petitioners in support of this loss contained
mathematical errors and duplications of the claimed losses
relating to individual items.
At trial, petitioners reduced the amount of loss claimed for
the flood damage in February of 1991 to $105,704.87, before
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