Trinity Meadows Raceway, Inc., Jack M. Lenavitt, A Person Other Than The Tax Matters Person - Page 8

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                    (b) Amount of Deduction.--For purposes of                         
               subsection (a), the basis for determining the amount of                
               the deduction for any loss shall be the adjusted basis                 
               provided in section 1011 for determining the loss from                 
               the sale or other disposition of property.                             
                    (c) Limitation of Losses of Individuals.--In the                  
               case of an individual, the deduction under subsection                  
               (a) shall be limited to--                                              
                         (1) losses incurred in a trade or                            
                    business;                                                         
                         (2) losses incurred in any transaction                       
                    entered into for profit, though not connected                     
                    with a trade or business; and                                     
                         (3) * * * losses of property not                             
                    connected with a trade or business or a                           
                    transaction entered into for profit, if such                      
                    losses arise from fire, storm, shipwreck, or                      
                    other casualty, or from theft.                                    
          Section 1.165-7, Income Tax Regs., provides in part:                        
                    �1.165-7. Casualty losses.--(a) In general--(1)                   
               Allowance of deduction.  * * * any loss arising from                   
               fire, storm, shipwreck, or other casualty is allowable                 
               as a deduction under section 165(a) for the taxable                    
               year in which the loss is sustained.  * * *  The amount                
               of a casualty loss shall be determined in accordance                   
               with paragraph (b) of this section.  * * *                             
                         (2) Method of Valuation.  (i) In                             
                    determining the amount of loss deductible                         
                    under this section, the fair market value of                      
                    the property immediately before and                               
                    immediately after the casualty shall                              
                    generally be ascertained by competent                             
                    appraisal.  This appraisal must recognize the                     
                    effects of any general market decline                             
                    affecting undamaged as well as damaged                            
                    property which may occur simultaneously with                      
                    the casualty, in order that any deduction                         
                    under this section shall be limited to the                        
                    actual loss resulting from damage to the                          
                    property.                                                         





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