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Respondent determined for 2001 a deficiency in petitioners’
Federal income tax of $3,015 and an accuracy-related penalty
under section 6662 of $603.
Petitioners concede their deductions for: (a) Medical
expenses; (b) personal property taxes of $126; (c) a charitable
contribution of $5,000 worth of numismatic items, and $4,106 in
carryover contributions from a prior year; and (d) “asset
protection expense”. Respondent concedes that petitioners are
entitled to deductions for real estate taxes of $849 and a
charitable gift of $5,000 worth of philatelic items.
The issues for decision are: (1) Whether petitioners are
entitled to itemized deductions for (a) additional charitable
gifts in cash and in kind, and (b) a casualty or theft loss of
$5,679, and (2) whether petitioners are liable for the accuracy-
related penalty under section 6662 due to negligence.
The stipulated facts and exhibits received in evidence are
incorporated herein by reference. At the time the petition was
filed, petitioners resided in Phoenix, Arizona.
Background
Petitioners were married in 1996 and “combined two adult
households into one small house.” Norman John Haas III
(petitioner), worked for Honeywell International, Inc., and Susan
Renee Haas was employed as a registered nurse during 2001.
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