- 5 -
serving and uncorroborated testimony in this regard. See Geiger
v. Commissioner, 440 F.2d 688, 689-690 (9th Cir. 1971), affg. per
curiam T.C. Memo. 1969-159; Tokarski v. Commissioner, 87 T.C. 74,
77 (1986). Accordingly, we sustain respondent’s determination.
Casualty Loss Deduction
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. The loss must arise from an
event that is identifiable, damaging to property, sudden,
unexpected, and unusual in nature. See White v. Commissioner, 48
T.C. 430, 433 (1967); Kielts v. Commissioner, T.C. Memo. 1981-
329. Generally, a casualty loss is deducted in the year the loss
is sustained. See sec. 165(a); Hunter v. Commissioner, 46 T.C.
477, 492 (1966); Allen v. Commissioner, T.C. Memo. 1984-630;
secs. 1.165-1(d)(1), 1.165-7(a)(1), Income Tax Regs. In
circumstances where the full extent of the loss is not known, the
deduction can be claimed in a subsequent year. See Kunsman v.
Commissioner, 49 T.C. 62, 72 (1967); Allen v. Commissioner,
supra. However, one’s entitlement to a casualty loss deduction
cannot be postponed beyond the year in which the full extent of
the loss is known. See Kunsman v. Commissioner, supra at 72;
Katz v. Commissioner, T.C. Memo. 1983-8.
Respondent disallowed petitioners’ casualty loss deduction
on the basis that petitioners had failed to establish: (1) The
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