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Auto's income in 1993 and 1994 and the casualty loss in 1994.
Thus, we hold that Frank’s income is increased by $21,006
and $14,218 in 1993 and 1994, respectively, and his casualty loss
is increased by $567 in 1994. Thomas’ income is reduced by
$10,695 and $8,091 in 1993 and 1994, respectively, and his
casualty loss should have been reduced by $322 in 1994. However,
with respect to Thomas’ casualty loss, respondent in the
applicable notice of deficiency erroneously concluded that
Thomas’ “taxable income is decrease [sic] by $1,865", and
compounded the error by subtracting the $1,865 from taxable
income instead of reducing his casualty loss from $2,187 to
$1,865 and thereby increasing taxable income by $322. In the
trial memorandum, respondent first states Thomas’ casualty loss
should be reduced by $1,865 and then states his loss is $1,865.
On brief, respondent states the adjustment should be “($1,865)”,
then states the loss should be increased by $1,865, and then
states his loss is $1,865. Respondent is obviously confused with
respect to this adjustment. In any event, we do not believe
respondent has standing to raise this issue for the first time in
a memorandum or on brief. Nash v. Commissioner, 31 T.C. 569, 574
(1958). Respondent did not amend the answer to increase the
deficiency over that determined in the notice of deficiency.
Accordingly, we sustain respondent’s determination on this issue
as set forth in the notice of deficiency.
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