Judith E. Stephenson Fast - Page 13

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          exceed adjusted basis.  Lamphere v. Commissioner, 70 T.C. 391,              
          395 (1978).  Ordinarily an appraisal is required.  Sec. 1.165-              
          7(a)(2)(i), Income Tax Regs.  The regulations also permit the               
          cost of repairs as evidence of the amount of the loss.  Sec.                
          1.165-7(a)(2)(ii), Income Tax Regs.  However, this must be the              
          cost of repairs actually made, not the estimated cost of repairs.           
          Lamphere v. Commissioner, supra at 396.  Petitioner has                     
          introduced no appraisal and no evidence of repairs actually made.           
          Thus, she is not entitled to the deduction.                                 
          Bad Debt                                                                    
               Petitioner claims a bad debt deduction in the amount of                
          $750.  Respondent argues that petitioner has not proved that the            
          debts were worthless and that petitioner did not include the $750           
          in income.  Petitioner taught some students in a nursing review             
          course, and they did not pay her the $750 they had agreed on.               
          Petitioner did not include the $750 in income.  Section 166(a)(1)           
          permits a deduction for debts that become worthless in the year             
          in issue.  Petitioner has provided no evidence that the debts               
          became worthless during the year in issue.  See sec. 1.166-2,               
          Income Tax Regs.  Moreover, to be entitled to a bad debt                    
          deduction, petitioner must have included the $750 in income                 
          either in 1993 or in some previous year.  Sec. 1.166-1(e), Income           
          Tax Regs.  She did not, and therefore she is not entitled to the            
          deduction.                                                                  





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