- 18 - We disagree with petitioner's claim that he may deduct his reported loss of $170,040. An individual may deduct an uninsured loss sustained during the taxable year if the loss was incurred: (1) In a trade or business or a for-profit transaction or (2) on account of a casualty or theft. Sec. 165(a), (c). A loss "must be evidenced by closed and completed transactions, fixed by identifiable events, and * * * actually sustained during the taxable year." Sec. 1.165-1(b), Income Tax Regs; see also sec. 1.165-1(d)(1), Income Tax Regs. The deduction for a loss is limited to the individual's basis in the underlying asset, as determined under section 1011, see sec. 165(b); Leighton v. Commissioner, T.C. Memo. 1995-515, affd. without published opinion 108 F.3d 332 (5th Cir. 1997); Fisher v. Commissioner, T.C. Memo. 1986-141; sec. 1.165-1(c), Income Tax Regs., and the individual bears the burden of proving his or her basis, Millsap v. Commissioner, 46 T.C. 751, 760 (1966), affd. 387 F.2d 420 (8th Cir. 1968). A loss cannot be computed where the individual's basis in the asset is not proven. Towers v. Commissioner, 24 T.C. 199, 239 (1955), affd. on other grounds sub nom. Bonney v. Commissioner, 247 F.2d 237 (2d Cir. 1957); Heckett v. Commissioner, 8 T.C. 841 (1947); see also Fisher v. Commissioner, supra.Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
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