-4- On May 26, 1993, petitioners filed an application with the U.S. Small Business Administration (SBA) for disaster relief. On June 3, 1993, in conjunction with petitioners' SBA loan application, an agent from the SBA visited petitioners' property for the purpose of evaluating the damage from the storms and preparing a written appraisal of the damage. The SBA report describes the damage to the property as a “washed out surface roadway.” The SBA report estimates repair cost to the road at $208,000. On their 1992 Federal income tax return, petitioners claimed a casualty loss of $220,000. Petitioners’ return was prepared by their accountant. This amount is equivalent to petitioners’ total adjusted basis in properties A and B, exclusive of the $6,844 attributable to the cost of the road extension constructed in 1984. The claimed casualty loss derived from damages to the road from the storms. In the notice of deficiency, respondent disallowed the casualty loss. OPINION At issue is the proper computation of petitioners’ 1992 casualty loss deduction.3 Petitioners claimed a $220,000 casualty loss because of purported damages to their road from 3 Although the loss at issue occurred in 1993, sec. 165(i)(1) permits any loss attributable to a casualty in an area subsequently declared a Federal disaster area, at the election of the taxpayer, to be taken into account for the taxable year immediately preceding the taxable year in which the disaster occurred.Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011