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After concessions, the following issues remain for our
consideration: (1) Whether petitioners are entitled to a
casualty loss deduction in the amount of $220,000 for the 1992
taxable year, and (2) whether any underpayment of tax is due to
either negligence or intentional disregard of rules or
regulations.
FINDINGS OF FACT2
Petitioners Imre and Gizella Cziraki are husband and wife
and resided in Huntington Beach, California, at the time of the
filing of their petition. In 1975, petitioners purchased two
parcels of property covering 80 acres in the county of San Diego
for $70,000. For simplicity, hereinafter the 80 acres of
property shall be referred to as “property A”. In 1983,
petitioners purchased 38 acres adjacent to property A for
$150,000. Hereinafter, the 38 acres of property shall be
referred to as “property B”.
Petitioners utilized properties A and B for their wholly
owned farming business, the Rainbow Hills Nursery. The Rainbow
Hills Nursery grows protea flowers, macadamia trees, aloe vera
plants, and palm trees for sale. At the time petitioners
purchased property A, there existed a road, partially of asphalt,
that traversed a portion of property A, but which did not
2 The stipulation of facts and the attached exhibits are
incorporated by this reference.
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