- 7 - 8(c), Income Tax Regs. The amount of the loss deduction is limited to the extent the loss exceeds $100 and the net casualty loss exceeds 10 percent of the taxpayer’s adjusted gross income. See sec. 165(h). In calculating petitioner’s tax liability for 2000, respondent did not allow petitioner a loss deduction for personal effects he claimed that he was prohibited from retrieving. Respondent argues that petitioner is not entitled to a theft loss deduction under section 165(a) because he did not substantiate either his basis in the property or that the property was involuntarily converted. Petitioner testified that the items at issue included a used laptop computer, some antique fountain pens, and a framed photograph of his wife. Petitioner further testified that to compensate him for the loss of these items, Howard Systems, Inc. drew up a “consultant invoice” for 16.5 hours of work at the rate of $80/hour. Howard Systems, Inc. then issued a check to petitioner for $1,320. Petitioner argues that he is entitled to deduct this amount because it was actually a theft reimbursement. First, petitioner provided no credible evidence that he was barred from the Wyeth-Pharmaceutical premises, nor did he substantiate his basis in the property allegedly taken from him as a result of his termination. Petitioner did not provide anyPage: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011