- 9 - that year. Consequently, petitioners were allowed the standard deduction for 1992. Petitioners did not claim a casualty loss deduction on their 1991 Federal income tax return. However, in their petition, petitioners alleged they were entitled to a casualty loss for 1991 of "$19,000, subject to limitations" in connection with the Foxbriar property. In an amended answer, respondent affirmatively alleged that petitioners were collaterally estopped from claiming deductions relating to or attributable to the Foxbriar property because the District Court ruled that petitioners had neither legal nor equitable ownership of the Foxbriar property during the years at issue. However, petitioners were effectively denied review of the District Court's judgment because it became moot on appeal, and their appeal was dismissed for that reason. See supra note 6. This Court, therefore, believes it more prudent to resolve the issues in this case on their merits rather than on the basis of collateral estoppel. The first issue for decision is whether, for the years at issue, petitioners are entitled to deductions for qualified residence interest and real property taxes, in connection with the Foxbriar property, in excess of that allowed by respondent. Section 163(a) provides that there shall be allowed as a deduction all interest paid or accrued within the taxable year onPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011