- 2 -
concessions2 the sole issue we must decide is whether petitioners
are entitled to the $455,720 casualty loss claimed on their 1994
Federal income tax return.
The stipulation of facts and attached exhibits are
incorporated herein. The stipulated facts are hereby found.
Background
When the petition was filed, petitioners resided in
Lakeville, Minnesota. In 1994, petitioners were the only
partners in the Chateau Deville Partnership.
The Chateau Deville Partnership owned a group of apartment
buildings located in Slidell, Louisiana. The apartment buildings
were damaged by flooding in 1995.3 Before the flood, the
apartment buildings' basis was $672,093. The fair market value
of the apartment buildings immediately prior to the flood was $2
million. The fair market value of the apartment buildings
immediately after the flood was $750,000.
Petitioners received insurance proceeds of $767,000 as
compensation for the flooding damage to the apartment buildings.
2 Respondent has conceded that petitioners are not liable
for the sec. 6662(a) accuracy-related penalty and are entitled to
a reduction of capital gains of $28,682, as opposed to the amount
of $14,828 stated in the notice of deficiency.
3 We note that the property suffered damage in 1995;
however, petitioners assert on brief that the surrounding area
was subsequently declared a disaster area by President Clinton
allowing the deduction to be taken in 1994 under sec. 165(i).
Respondent does not dispute this assertion in his brief, reply
brief or mention the issue in the notice of deficiency.
Page: Previous 1 2 3 4 5 Next
Last modified: May 25, 2011