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property immediately before the casualty and the fair market
value of the property immediately after the casualty must
generally be ascertained by competent appraisal. Sec. 1.165-
7(a)(2)(i), Income Tax Regs.
At trial, petitioner boasted that “I’ve kept very detailed
records.” Nevertheless, petitioner, a former practicing attorney
with litigation experience and a degree in accounting, failed to
introduce one shred of documentary evidence regarding his
adjusted basis in any of the items of property involved.
Similarly, petitioner failed to introduce one shred of
documentary evidence regarding the fair market value of any of
those items. It is well established that if a taxpayer fails to
prove the taxpayer’s adjusted basis in the property involved, no
casualty loss is allowable. Zmuda v. Commissioner, 79 T.C. 714,
727 (1982), affd. 731 F.2d 1417 (9th Cir. 1984); Millsap v.
Commissioner, 46 T.C. 751, 760 (1966), affd. 387 F.2d 420 (8th
Cir. 1968); see sec. 1.6001-1(a), Income Tax Regs. (requiring
taxpayers to maintain records sufficient to permit verification
of losses).
On brief, petitioner asks that we apply the approach used in
Cohan v. Commissioner, 39 F.2d 540 (2d Cir. 1930), and
approximate the amount of his alleged losses. Although we have
occasionally followed that approach in other cases when it has
been appropriate to do so, e.g., Daniel v. Commissioner, T.C.
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Last modified: May 25, 2011