Tommy Lee Randle and Joyce Faye Randle - Page 3

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               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.                                      
               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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