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361 (1975); sec. 1.165-1(d)(2), Income Tax Regs.
Based on our examination of the entire record before us, we
find that Mr. Mitic has failed to establish that under section
1.165-1(d)(1) and (2), Income Tax Regs., petitioners sustained
any loss in 1994 with respect to Mr. Mitic’s Mercedes. We
further find on that record that Mr. Mitic has failed to show
that petitioners are entitled to the casualty loss deduction
claimed in the 1994 joint return. Consequently, we sustain
respondent’s determination disallowing that claimed deduction.
Claimed Depreciation Deduction
In the 1994 joint return, petitioners claimed a depreciation
deduction for the entire year with respect to the Geo that
petitioners acquired from their son in December 1994. Respondent
disallowed that deduction. Mr. Mitic makes no argument on brief
with respect to the depreciation deduction that petitioners
claimed for 1994 with respect to the Geo.
Section 167(a) allows a deduction for depreciation with
respect to property used in a trade or business or held for the
production of income. Based on our examination of the entire
record before us, we find that Mr. Mitic has failed to establish
that during 1994 petitioners used the Geo in a trade or business
or held it for the production of income.9 We further find on
9Mr. Mitic conceded at trial that petitioners kept no mile-
age log, calendar, or other documentation to show that the Geo
(continued...)
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