George B.N. Ayittey - Page 6

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               Turning to the item described as a book manuscript,                    
          petitioner testified that the manuscript was the foundation for             
          three future books.  He determined that it had a fair market                
          value of $15,000 because he had received advances from publishers           
          for previous books.  But, petitioner admitted that he had no                
          record of the cost or expenses (apart from his time and labor) in           
          the creation of the manuscript.  In short, he has not established           
          that he had a cost basis in the manuscript.                                 
               With regard to copies of magazines, journals, and books,               
          again petitioner has no records concerning the costs of these               
          items.  Furthermore, petitioner admits that he would have                   
          deducted the costs of at least some of the magazines, journals,             
          and books in prior years.  We note also with respect to the other           
          claimed deductions, including particularly the manuscript, any              
          costs would appear to have been deducted in prior years.  See,              
          e.g., sec. 263A(h); see also Hadley v. Commissioner, 819 F.2d 359           
          (2d Cir. 1987).                                                             
               Turning to the remainder of the items claimed as a casualty            
          loss deduction, even if we assume that petitioner had bases or              
          costs in the amounts claimed, petitioner collected $12,500 from             
          insurance, and respondent allowed a casualty loss deduction of              
          $9,448.  Under these circumstances, we fail to understand how the           
          bases or costs of these items would be deductible.  We sustain              
          respondent’s determination with respect to the casualty loss                
          deduction.                                                                  




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