Joseph C. Minneman - Page 8

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         and 1991, as well as fraud penalties under section 6663 for those            
         same 3 years.                                                                
              In the notice of deficiency, respondent also allowed in part            
         and disallowed in part petitioner’s claim for refund for 1989                
         (made pursuant to petitioner’s amended return for that year).                
         Thus, respondent allowed petitioner a deduction for a casualty               
         loss for 1989 in the amount of $55 (after taking into account the            
         $100 limitation of section 165(h)(1) and the 10-percent                      
         limitation of section 165(h)(2)(A)).  In computing the deficiency            
         for 1989, respondent did not take this deduction into account                
         because the deduction, together with petitioner’s other itemized             
         deductions, was less than the standard deduction to which                    
         petitioner was otherwise entitled.  See sec. 63(c).                          
         F.  Petitioner’s Testimony at Trial                                          
              At trial, petitioner testified that he was divorced in 1989;            
         that after his divorce he relocated to another residence and                 
         another law office; that he rented a private garage in order to              
         store excess belongings; and that he subsequently discovered that            
         some of his belongings (namely, a washing machine, a lawnmower,              
         and a lawnseeder) had been removed from the garage and that his              
         remaining belongings (namely, books, notes and awards, law                   
         library, office furniture and equipment, and “professional                   
         research”) had sustained water damage.  In addition, petitioner              
         testified that he filed a police report; that he commenced an                

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