Steven K. Stoddard and Ellen M. Stoddard - Page 16

                                       - 16 -                                         
          Claimed Casualty Loss Deduction                                             
               Respondent determined to disallow a casualty loss deduction            
          of $138,256 that petitioners claimed in their 1997 joint return             
          with respect to the Quissett.8  Petitioners contend that on                 
          January 3, 1997, a storm caused damage to the Quissett and that             
          therefore they are entitled to a casualty loss deduction for                
          1997.  Respondent contends, inter alia, that petitioners have               
          failed to establish that the alleged storm occurred and that the            
          Quissett sustained the alleged damage during that alleged storm.            
               Section 165(a) allows a deduction for any loss sustained               
          during the taxable year and not compensated for by insurance or             
          otherwise.  A loss is treated as sustained during the taxable               
          year in which the loss occurs, as evidenced by closed and com-              
          pleted transactions and as fixed by identifiable events occurring           
          in such taxable year.  Sec. 1.165-1(d)(1), Income Tax Regs.                 
               As pertinent here, section 165(c)(3) limits the deduction              
          allowed by section 165(a) in the case of an individual to a loss            
          that arises from fire, storm, shipwreck, or other casualty, or              

               8Respondent further determined to disallow the NOL carryback           
          deductions that petitioners claimed in their 1995 amended joint             
          return and their 1996 amended joint return of $87,812 and                   
          $30,045, respectively.  Resolution of respondent’s determinations           
          to disallow petitioners’ claimed NOL carryback deductions for               
          1995 and 1996 will flow automatically from our findings and                 
          resolution of respondent’s determination to disallow petitioners’           
          casualty loss deduction claimed for 1997.                                   

Page:  Previous  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  Next

Last modified: May 25, 2011