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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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