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paid to restore property to its precasualty condition. Sec.
1.165-7(a)(2)(ii), Income Tax Regs.
Generally, a casualty loss may be deducted in the year in
which the loss occurs. Sec. 1.165-7(a)(1), Income Tax Regs. A
reasonable prospect for reimbursement of a loss (e.g., by
insurance or lawsuit) will prevent a casualty loss from being
deductible until the year in which the reasonable prospect for
reimbursement no longer exists. Sec. 1.165-1(d)(2), Income Tax
Regs.
Petitioner no longer claims that she is entitled to a $3,050
casualty loss deduction for thefts of a notebook and a digital
camera, as claimed on her 2003 Federal income tax return.
Rather, petitioner now argues that the $3,050 claimed casualty
loss deduction is allowable based on theft damage that occurred
to her car in 2002 and accident damage that occurred to her car
in 2003.
Without a showing that petitioner in 2002 had a reasonable
prospect for reimbursement of the costs of repairing the car
theft damage (deferring any casualty loss deduction relating
thereto until at least 2003) and that petitioner in 2003 had no
such prospect, a casualty loss deduction relating to theft damage
to petitioner’s car is not available to petitioner in 2003.
As to the accident damage to petitioner’s car, because
petitioner did not repair her car and did not obtain an estimate
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Last modified: November 10, 2007