Andrew E. Blanche, Jr., and Cynthia D. Blanche - Page 27




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          made any capital expenditure in connection with the Foxbriar                
          swimming pool prior to 1994.                                                
               Petitioners rely on Rev. Rul. 73-41, 1973-1 C.B. 74, for the           
          proposition that casualty loss deductions can be allowed to mere            
          lessees.  Petitioners’ reliance on this revenue ruling is                   
          misplaced.  The taxpayer in the cited revenue ruling was a lessee           
          of residential property who, under the terms of the lease, was              
          required to surrender the property in good condition at the                 
          termination of the lease.  A fire severely damaged much of the              
          property just prior to the lease expiration, and the taxpayer               
          failed to surrender the property in good condition.  The taxpayer           
          denied liability for the damage, and the lessor sued.  A judgment           
          was rendered against the taxpayer.  The ruling held that the                
          "loss sustained upon payment of the judgment was directly                   
          attributable to the fire", and, thus, the taxpayer was entitled             
          to a casualty loss deduction with respect thereto.                          
               Petitioners in the instant case were not required, under               
          their contract with the Hewitts, to repair the damage to the                
          swimming pool and had no judgment rendered against them with                
          respect to the swimming pool damage, an element which appears to            
          have been essential in the revenue ruling.  Moreover, it is well            
          established that "the authoritative sources of Federal tax law              
          are in the statutes, regulations, and judicial decisions and not            
          in * * * informal [IRS] publications."  Zimmerman v.                        
          Commissioner, 71 T.C. 367, 371 (1978), affd. without published              






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