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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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