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$450 charitable contribution.
A. Casualty Losses
Pursuant to section 165(a) and (c)(3), a taxpayer is allowed
a deduction for an uncompensated loss that arises from fire,
storm, shipwreck, or other casualty. Section 165(h), however,
states that any “loss * * * shall be allowed only to the extent
that the amount of the loss to such individual arising from each
casualty * * * exceeds $100” and only to the extent that the net
casualty loss “exceeds 10 percent of the adjusted gross income”.
Petitioner has the burden of proving the casualty losses. See
Rule 142(a).
The proper measure of the amount of the loss sustained is
the difference between the fair market value of the property
immediately before and after the casualty, not to exceed its
adjusted basis. See sec. 1.165-7(b)(1), Income Tax Regs. The
fair market values required by the Treasury regulations must
generally be ascertained by competent appraisal. See sec. 1.165-
7(a)(2)(i), Income Tax Regs. As an alternative, the Treasury
regulations provide that if the taxpayer has repaired the
property damage resulting from the casualty, the taxpayer may use
the cost of repairs to prove the casualty loss. See sec. 1.165-
7(a)(2)(ii), Income Tax Regs. Estimates of the cost of repairs,
however, are not evidence of the actual costs of repairs unless
the repairs are actually made. See Lamphere v. Commissioner, 70
T.C. 391, 396 (1978); Farber v. Commissioner, 57 T.C. 714, 719
(1972).
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Last modified: May 25, 2011