Scott L. Lafavre and Shari L. Lafavre - Page 2

                                         - 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.                  
               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