Norman John Haas III and Susan Renee Haas - Page 10

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         insurance.  The Court accepts petitioners’ evidence and finds                
         that they were not compensated by insurance or otherwise for the             
         loss from damage to the truck caused by theft.                               
              In the case of an individual, section 165(c)(3) allows a                
         taxpayer to claim as a deduction any loss from theft or casualty             
         sustained during the taxable year.  The loss is allowed only to              
         the extent that it exceeds $100 and the net casualty loss is in              
         excess of 10 percent of the taxpayer’s adjusted gross income.                
         Sec. 165(h).  The amount of the loss allowable as a deduction is             
         the lesser of (1) the difference between the fair market value of            
         the property immediately before and immediately after the                    
         casualty, or (2) the adjusted basis of the property.  Helvering              
         v. Owens, 305 U.S. 468 (1939); sec. 1.165-7(a)(2) and (b), Income            
         Tax Regs.  The fair market value of the property immediately                 
         before and immediately after the casualty “shall generally be                
         ascertained by competent appraisal.”  Sec. 1.165-7(a)(2), Income             
         Tax Regs.                                                                    
              Petitioners’ case is made difficult to decide in their favor            
         because they have no appraisals for the fair market value of the             
         truck immediately before and immediately after it was damaged.               
         Respondent argues for the use of the Blue Book as an appropriate             
         guide for determining the value of petitioners’ truck immediately            
         before the casualty.  Using the Blue Book, respondent would value            







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