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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 any
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