- 2 -
Respondent determined a deficiency in petitioners’ Federal
income tax for the taxable year 1996 in the amount of $2,437.
After concessions,2 the issues for decision are as follows:
(1) Whether a casualty loss arising from the Northridge
earthquake in 1994 was “sustained” in 1996 (the taxable year in
issue) or in some prior year. We hold that the casualty loss was
not sustained in 1996 but in a prior year.
(2) Whether the amount of the loss deductible under section
165 has been shown to be the amount claimed by petitioners on
their 1996 return. We need not reach this issue because of our
holding in respect of the prior issue.
Background
Some of the facts have been stipulated, and they are so
found. Petitioners resided in San Dimas, California, at the time
that their petition was filed with the Court.
2 Petitioners concede that they failed to report a part
($5,199) of a distribution ($16,014) from petitioner Tommy Lee
Randle’s individual retirement account, all of which is taxable.
Petitioners also concede that the distribution is subject to the
10-percent additional tax under sec. 72(t) on early distributions
from qualified retirement plans.
The parties agree that the adjustment made to the deduction
claimed by petitioners for medical expenses on Schedule A,
Itemized Deductions, is a computational matter.
Finally, the parties agree that the deficiency determined by
respondent in the notice of deficiency does not take into account
a payment made by petitioners in the amount of $1,601. We expect
this payment to be reflected in the decision to be entered in
this case.
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