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amounts allowed by respondent. Most of the expenses claimed by
petitioner are subject to the strict substantiation requirements
of section 274(d). We do find that petitioner has substantiated,
in a manner that satisfies section 274(d), $172.31 of the claimed
meal expenses. Accordingly, we hold that petitioner is entitled
to a deduction for meals in the amount of $172.31 and is not
entitled to a deduction for repairs or car expenses.
3. Casualty Loss
Petitioner contends that on March 15, 1993, he purchased a
boat and trailer for $10,000 cash. Petitioner further claims
that the boat and trailer were stolen the next day, on March 16,
1993. Petitioner never reported this supposed theft to the
police, nor did he file an insurance claim. On his 1993 Federal
income tax return, petitioner claimed that his adjusted cost
basis in the stolen property was $9,500. Petitioner has not
provided any explanation concerning the discrepancy between his
claimed adjusted cost basis and the alleged purchase price.
Section 165 provides that individual taxpayers may deduct
certain losses, including losses resulting from theft, sustained
during the taxable year and not compensated by insurance or
otherwise. See sec. 165(a), (c)(3). The amount of a theft loss
is equal to the lesser of (1) the fair market value at the time
of the theft, or (2) the adjusted cost basis of the property in
question. See sec. 1.165-8(c), Income Tax Regs.
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