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an attachment to their 1993 amended return that the $13,010 loss
that they were claiming in that Form 4797 was reported on line
15, Other gains or (losses), of their 1993 return, rather than in
their 1993 Schedule D, as reported in their original 1993 return.
For 1994 and 1995, petitioners reported petitioner's automo-
bile repair activity as a partnership and claimed losses from
that partnership in the amounts of $13,013 and $6,161, respec-
tively.
Petitioners' Claimed Casualty Loss
During 1994, petitioners received $3,067 from the Federal
Emergency Management Agency stemming from a claim due to an
earthquake that occurred during 1994 (Northridge earthquake). At
the time of that earthquake, petitioners were not covered by
insurance for earthquake damage.
During March 1994, petitioners received two estimates of the
cost of repairs to their house, one from Steven Berkus Construc-
tion for $15,900 (Berkus estimate) and one from Ernesto Laurel
(Mr. Laurel) for $16,300 (Laurel estimate). Each of those
estimates indicated that it was for repairs due to earthquake
damage. During 1994, petitioners purchased $561 worth of sup-
plies and hardware, and they paid Mr. Laurel $655.
Although the Northridge earthquake occurred during 1994,
pursuant to section 165(i)(1), petitioners claimed a casualty
loss deduction of $11,371 in Form 4684, Casualties and Thefts
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