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OPINION
1. Casualty Loss Deductions
Petitioner asserts that as a result of his then-wife’s
decision to terminate her pregnancy in 1974 or 1975, petitioner
suffered a “theft/casualty” loss of a “nonviable fetus”. In
response to this loss, petitioner claims entitlement to casualty
loss deductions for each of the years 1992 through 1995 of
$50,729, $58,056, $4,704, and $13,899, respectively. These
losses roughly correspond to the amount of gross income reported
for each year.
Section 165(a) allows a deduction for losses sustained
during the taxable year which are not compensated for by
insurance or otherwise. Under section 165(c), however, an
individual may deduct a loss not connected with a trade or
business or with a transaction entered into for profit if the
loss arose from “fire, storm, shipwreck, or other casualty, or
from theft.” Sec. 165(c)(3). Casualty losses under section 165
must be deducted for the taxable year in which the loss was
sustained. See sec. 1.165-7(a)(1), Income Tax Regs. Losses due
to theft may be deducted during the taxable year in which the
taxpayer discovered the loss. See sec. 165(e).
casualty loss resulted when his then wife elected to terminate
her pregnancy in August 1974.
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Last modified: May 25, 2011