*240 Held, that the petitioners have not shown that the respondent erred in disallowing a deduction claimed by them as a loss from the confiscation of property by the Czechoslovakian government.
Memorandum Findings of Fact and Opinion
ATKINS, Judge: The respondent determined a deficiency in income tax of $2,820.27 for the taxable year 1960.
The only question presented is whether the petitioners are entitled to deduct a loss*241 of $20,000 claimed to have been sustained as a result of seizure of property by the Czechoslovakian government.
Findings of Fact
Most of the facts have been stipulated and the stipulation is incorporated herein by this reference.
The petitioners, husband and wife, filed a joint income tax return for the taxable year 1960 with the district director of internal revenue at Hartford, Connecticut. Hereinafter Teresa Richter will be referred to as the petitioner.
The petitioner was born in Budapest, Hungary, on May 5, 1915. Her parents were Dr. Richard Schlesinger and Mrs. Alice Schwitzer Schlesinger. She resided with her parents in Lapasski Darmoty, Slovakia, until her marriage to Charles K. Richter on November 10, 1936. Thereafter she resided with her husband in Nitra, Slovakia.
On March 7, 1939, the petitioners left Slovakia and emigrated to Canada. They have never since revisited, or resided or lived in, Slovakia (or Czechoslovakia). They have been citizens of the United States for a number of years.
Petitioner is the niece of Ludovit and Anna Schwitzer, both of whom died during the year 1944. Petitioner's mother died on February 2, 1942, and her father died in 1944.
In*242 1945 the government of Czechoslovakia instituted a broad nationalization and confiscation program. By virtue of Section 7 of Law 41/53 Sb. effective June 1, 1953, such government annulled bank accounts and savings accounts which had been made on or prior to November 15, 1945 in old currency.
Life insurance policies were put upon the same basis as bank accounts and the proceeds (cash value) thereof as of December 31, 1945 in "old crowns" were placed in blocked accounts. These blocked accounts were later annulled as of June 1, 1953, by Law 41/53 Sb.
Under Czechoslovakian Agrarian Reform Act No. 46/1948 Sb., farm, meadow, and forest land in excess of 50 hectares (approximately 124 acres) and farm, meadow, and forest land which was not tilled by the owners was expropriated by the State. Livestock and equipment situated upon or used in conjunction with the land were also expropriated under that act.
The German government confiscated all land, bank accounts, and insurance proceeds located in Czechoslovakia during the German occupation of Czechoslovakia during World War II.
At some undisclosed time the petitioner filed a claim with the Foreign Claims Settlement Commission of the United*243 States.
In the joint income tax return filed for the taxable year 1960, the petitioner claimed a deduction of $20,000 as a casualty loss under
In the notice of deficiency the respondent disallowed the claimed deduction of $20,000, stating "You did not establish this loss, or any portion thereof, as allowable under
Opinion
A taxpayer seeking a deduction must be able to point to an applicable statute and show that he comes within its terms.
Here the deduction of $20,000 was claimed by the petitioners as a casualty loss under
*246 While, in a statement attached to the return, the petitioner describes in a general way the property which she claimed she owned in Czechoslovakia and which she claimed was seized by the Czechoslovakian government, no proof was adduced at the hearing to establish her ownership thereof. We appreciate the difficulty in proving ownership in a case of this nature, but, nevertheless, in the absence of such proof the petitioner has failed to show one of the essential elements necessary to the allowance of a deduction. See
Another prerequisite to the establishment of a right to a loss deduction under
Finally, it should be pointed out that losses are deductible in the*247 year in which some identifiable event occurs which fixes the loss. There is no evidence to show that any loss which may have been sustained was sustained in the taxable year 1960. See
We hold that the petitioners have failed to show error in the respondent's disallowance of the claimed deduction.
Decision will be entered for the respondent.
Footnotes
1.
Section 165 of the Code provides in part as follows:(a) General Rule. - There shall be allowed as a deduction any loss sustained during the taxable year and not compensated for by insurance or otherwise.
(b) Amount of Deduction. - For purposes of subsection (a), the basis for determining the amount of the deduction for any loss shall be the adjusted basis provided in section 1011 for determining the loss from the sale or other disposition of property.
(c) Limitation on Losses of Individuals. - In the case of an individual, the deduction under subsection (a) shall be limited to -
(1) losses incurred in a trade or business;
(2) losses incurred in any transaction entered into for profit, though not connected with a trade or business; and
(3) losses of property not connected with a trade or business, if such losses arise from fire, storm, shipwreck, or other casualty, or from theft. * * *↩