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belongings in "storage units", and rented another residence.
Abnormally wet weather during the year caused the storage units
to leak badly.
Petitioner Barbara Werner's father, Col. James Richard
Kelly, was a former dean of the New Mexico Military Academy. An
avid reader and historian, he amassed a large personal library.
The collection included books that were leather bound,
antebellum, and signed editions. The items were subjected to
water damage, most beyond repair.
On Schedule A of petitioners' Federal income tax return,
petitioners claimed a casualty loss deduction of $37,222.
Included with the return was a Form 4684, Casualties and Thefts,
reporting the loss of the books in the amount of $30,000 and the
loss of some furniture accounting for the balance of the claimed
amount.
During the examination of petitioners' return, petitioners
presented to the auditor a copy of an appraisal prepared by an
appraiser certified by the International Society of Appraisers.
According to the cover letter forwarding the appraisal to
petitioner Milton C. Werner:
The objective of the appraisal, at your request, was to
estimate the Fair Market Value of the household
furniture prior to damage, and in current damaged
condition. The books were appraised at Replacement
Value, for the purpose of settling an insurance claim.
These values are effective as of the inspection date.
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Last modified: May 25, 2011