- 4 -
Petitioner claims a casualty loss of $48,890.15.1
OPINION
A. Long-Term Capital Gain
Petitioner’s investment with Fidelity Investments in 1997
was in shares of a mutual fund. The mutual fund’s asset
allocation, as of December 31, 1997, was 33 percent stock, 60
percent bonds, and 7 percent short-term securities. Petitioner
argues that because line 5 instructs the taxpayer to include
“gross dividends and/or other distributions on stock”, the $5,603
long-term capital gain does not belong on line 5 of Schedule B
(emphasis added). Since the distribution in question came from a
mutual fund with an asset allocation of 60 percent in bonds,
petitioner argues that he need not include on line 5 the amount
of the capital gain distribution from shares of this mutual fund.
Section 61(a) provides that gross income includes “all
income from whatever source derived,” unless otherwise provided.
Section 61(a)(7) specifically provides that dividends are
included in gross income, and section 61(a)(3) provides that
gross income includes gains derived from dealings in property.
1 This figure represents the net amount claimed after
applying the limitation provisions of sec. 165(h)(1) and (2),
which reduces the gross amount claimed, $50,781.23, by $1,891.08.
At trial, petitioner claimed that he had made improvements to the
house, increasing its adjusted basis from $40,000 to $50,781.23.
On Form 4684, Casualties and Thefts, petitioner listed the value
of his house before the casualty as $50,781.23, and stated that
the value of the house after the casualty was zero, although he
sold the house the following year for $39,500.
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011