- 13 -
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.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011