- 28 -
opinion 614 F.2d 1294 (2d Cir. 1979); accord Adler v.
Commissioner, 330 F.2d 91, 93 (9th Cir. 1964); Green v.
Commissioner, 59 T.C. 456, 458 (1972); Aldridge v. Commissioner,
51 T.C. 475, 482 (1968).
Finally, this Court has previously stated that "damage to
property which one is leasing entitles one to a deduction for the
loss sustained to the leasehold interest." Fryer v.
Commissioner, T.C. Memo. 1974-77. However, petitioners had no
basis in their leasehold interest on the Foxbriar property. See
Fryer v. Commissioner, supra. Thus, the Court is unable to
compute or allow petitioners a deduction for any loss to a
leasehold interest. See Millsap v. Commissioner, supra; Fisher
v. Commissioner, supra; sec. 1.165-1(c), Income Tax Regs.
On this record, the Court holds that petitioners are not
entitled to deduct a casualty loss for 1991 in connection with
the Foxbriar property.
The final issue for decision is whether petitioners are
entitled to a deduction for a nonbusiness bad debt loss in
connection with the Foxbriar property for 1991. Petitioners
claimed on their 1991 Federal income tax return, on Form 4797,
Sales of Business Property, a loss of $9,719 in connection with
the Foxbriar property. That amount consisted of the following
items:
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