- 17 - was unsuccessful in collecting any judgment against the airport, and, as a result, she was not compensated for her loss.4 Respondent contends that petitioner's casualty loss is not deductible until such time as there is no reasonable prospect of a recovery of such loss. Respondent argues that petitioner's loss did not become uncollectible until 1995 because, up until that time, petitioner continued her efforts to collect damages from the airport; thus, the possibility existed that her loss would be compensated for after 1989 up until the disposition of her suit in October 1995. Additionally, respondent contends that petitioner failed to substantiate either her basis in or the fair market value of the damaged property. Section 165(a) allows a taxpayer to deduct any loss sustained during the taxable year and not compensated for by insurance or otherwise. In particular, section 165(c)(3) allows a deduction to an individual for loss of property not connected with a trade or business or a transaction entered into for profit, if such loss arises from fire, storm, shipwreck, or other casualty, or from theft. Personal casualty or theft losses are deductible only to the extent that the loss exceeds $100 and 10 percent of adjusted gross income. Sec. 165(h)(1) and (2). 4 Respondent does not contend that any portion of the losses was compensated by insurance.Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
Last modified: May 25, 2011