Searcy M. Ferguson, Jr., and Elizabeth L. Ferguson - Page 11

                                       - 11 -                                         
          bankruptcy trustee’s final report indicates that the Vernon                 
          property was not abandoned by the bankruptcy estate.  As noted              
          above, the court approved an application filed by the bankruptcy            
          trustee to abandon remaining property, books, and records of the            
          bankruptcy estate in May of 2003.  At that time, however, the               
          bankruptcy estate did not include the Vernon property, which was            
          the subject of the foreclosure by Herring National Bank in 2001.            
          Petitioners have failed to demonstrate that the bankruptcy estate           
          abandoned the Vernon property in 2000.  Consequently, we hold               
          that petitioners are not entitled to deduct a loss in 2000 with             
          respect to the alleged abandonment.7                                        
          Alleged Theft or Embezzlement of the Diamond Ring by Ms. Smith              
               Respondent contends that petitioners are not entitled to a             
          theft loss deduction because Ms. Smith lawfully possessed the               
          diamond ring pursuant to the divorce agreement.  Petitioners                
          contend that the corporation owned the diamond ring at all                  
          relevant times,8 that the corporation was not a party to the                




               7Because we hold that petitioners failed to demonstrate that           
          the bankruptcy estate abandoned the Vernon property in 2000, we             
          need not decide whether such an abandonment would result in a               
          loss for Federal income tax purposes.  See Benton v.                        
          Commissioner, 122 T.C. 353, 368-369 (2004).                                 
               8Petitioners contend that the divorce agreement created a              
          bailment with respect to the diamond ring, and Ms. Smith held a             
          mere right to possession as the bailee.                                     





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011