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entitled to deduct the claimed Schedule C car and truck expenses
at issue. Consequently, we sustain respondent’s determinations
disallowing those claimed expenses.
Certain Insurance Reimbursements
Respondent determined that petitioners must include in
income for 1994 and 1995 insurance proceeds in the amounts of
$4,300 and $4,700, respectively, that they received as reimburse-
ments for certain of Mr. Owens’ business tools which had been
stolen in prior years and the cost of which petitioners deducted
in returns that they had filed prior to 1994 and 1995.
Based on our examination of the entire record before us, we
find that petitioners have failed to prove that the insurance
reimbursements of $4,300 and $4,700 that they received during
1994 and 1995, respectively, do not constitute income.11 See
sec. 1.165-1(d)(2)(iii), Income Tax Regs. Consequently, we
sustain respondent’s determinations with respect to those insur-
ance reimbursements.
Claimed Net Operating Loss Deductions
At trial, petitioners took the position that they are
entitled to a net operating loss deduction for each of the years
at issue, which is attributable to net operating loss carryovers
11We are not persuaded by petitioners’ general, vague, and
conclusory testimony regarding their alleged purchase of other
tools during 1994 and 1995 that the insurance reimbursements at
issue do not constitute income.
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