- 7 - South Carolina (1976) as a result of his violation of South Carolina’s gambling laws. Petitioners have not argued that this deduction falls under section 162 as an ordinary and necessary business expense, so we rely on the general principle that a deduction for property forfeited under Federal or State forfeiture laws, if allowed at all, falls under the loss deduction provisions of section 165. See Fuller v. Commissioner, 213 F.2d 102, 105-106 (10th Cir. 1954), affg. 20 T.C. 308 (1953); Holmes Enters., Inc. v. Commissioner, 69 T.C. 114, 116-117 (1977); Holt v. Commissioner, 69 T.C. 75, 78-79 (1977), affd. per curiam 611 F.2d 1160 (5th Cir. 1980); see also Gambina v. Commissioner, 91 T.C. 826, 827 n.3 (1988); Bailey v. Commissioner, T.C. Memo. 1989-674, affd. without published opinion 929 F.2d 700 (6th Cir. 1991); Mack v. Commissioner, T.C. Memo. 1989-490; Farris v. Commissioner, T.C. Memo. 1985-346, affd. without published opinion 823 F.2d 1552 (9th Cir. 1987). Accordingly, we must decide whether petitioners are entitled to a loss deduction under section 165 for 1999. Section 165(a) allows a deduction for “any loss sustained during the taxable year and not compensated for by insurance or otherwise.” In the case of an individual, the deduction is limited to losses incurred in the individual’s trade or business or in any transaction entered into for profit and to certain casualty losses. Sec. 165(c). The facts disclose thatPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
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