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entitled for that year to an ordinary loss deduction of $13,010
under section 1231 with respect to that sale.
Petitioner's Claimed Casualty Loss Deduction
Petitioners contend that, pursuant to section 165(a) and
(i)(1),7 they are entitled for 1993 to a casualty loss deduction
of $11,509, which is the amount they claimed in their 1993
amended return. Although respondent concedes that petitioners
had a casualty loss of $1,2168 within the meaning of section
165(c)(3), respondent contends that petitioners are not entitled
to deduct that loss because of the limitation in section 165(h).9
6(...continued)
that automobile in good working condition, as petitioner did.
Petitioners appear to make the same contention on brief. We are
unwilling to rely on Mr. Grenville-Jones' testimony, or
petitioners' contention on brief, for petitioners as establishing
that petitioner intended to acquire and/or hold petitioner's
Ferrari for profit.
7 Sec. 165(i) permits a taxpayer to take a deduction for a loss
attributable to a disaster occurring in an area that is
determined by the President of the United States to warrant
assistance by the Federal Government under the Disaster Relief
and Emergency Assistance Amendments of 1988 for the taxable year
immediately preceding the taxable year in which the disaster
occurred.
8 The $1,216 casualty loss which respondent concedes petitioners
incurred for 1993 consists of $561 worth of supplies and hardware
that petitioners purchased during 1994 and $655 that petitioners
paid to Mr. Laurel during that year.
9 Sec. 165(h) limits the amount of a deduction for a casualty
loss attributable to property that is not used in a trade or
business or for the production of income (personal casualty
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