- 5 -
reduced by $100 per casualty, exceed 10 percent of adjusted gross
income. Sec. 165(h)(1) and (2). The term "other casualty"
refers to losses arising from sudden and unexpected events.
White v. Commissioner, 48 T.C. 430, 435 (1967). A taxpayer is
not entitled to claim a theft loss pursuant to section 165 with
respect to lost or misplaced property. See Sussel v.
Commissioner, T.C. Memo. 1966-243 (disallowing theft loss where
evidence indicated bracelet might have been lost rather than
stolen). Where it is established that a theft loss has occurred,
the taxpayer must treat the loss as sustained in the year in
which the loss is discovered. Sec. 165(e).
To meet her burden of proof on this issue, petitioner must
establish that a theft or other casualty occurred. Bellis v.
Commissioner, 540 F.2d 448, 449 (9th Cir. 1976), affg. 61 T.C.
354 (1973). At trial, petitioner testified that she was not sure
whether her jewelry was stolen, lost, or misplaced. On the basis
of the record before us, we conclude that petitioner has failed
to prove that any theft or other casualty occurred with respect
to her missing jewelry.3 For that reason, petitioner is not
3 We also note that even if petitioner was able to
establish that her jewelry was stolen, she would be entitled to a
deduction, if at all, for the taxable year 1993, the year in
which she discovered the theft, rather than for the year in
issue. McKinley v. Commissioner, 34 T.C. 59, 63 (1960).
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011