1981 Tax Ct. Memo LEXIS 312 | Tax Ct. | 1981
MEMORANDUM OPINION 1
DAWSON,
All of the facts are stipulated and are found accordingly. The pertinent facts are summarized below.
Dixon F. Miller (petitioner) was a resident of Columbus, Ohio, when he filed his petition in this case.
In June 1976, a friend of petitioner, while operating petitioner's 1970 Pearson Sloop (hereinafter referred to as the boat) with his permission, ran it aground. This accident resulted in damage to the boat in the amount of $ 842.55. Although petitioner had an insurance policy that covered this casualty loss, he did not file a claim with his insurance company (hereinafter referred to as the company), because he believed that, if he did submit a claim, the company would cancel not only the policy covering his boat but also policies covering his apartment and personal automobile.
1981 Tax Ct. Memo LEXIS 312">*314 Prior to December 1974, petitioner purchased his insurance policies and made claims thereon at the following times:
Type of | ||
Policy | Purchased | Claims Filed |
Personal automobile | 1969 | November 1969 |
January 1970 | ||
December 1973 | ||
Boat | September 1972 | None |
Apartment | Sometime prior | February 1974 |
to February 1974 |
In December 1974, petitioner's insurance brokers notified him that they had received instructions from the company to terminate all of his insurance policies on their next renewal dates. They told petitioner that they would do their best to obtain policies with another company for him, but that he could expect to pay higher premiums. Petitioner requested that the brokers try to persuade the company to allow him to retain his then existing policies. The brokers convinced the company to permit petitioner to keep the policies, but the company imposed higher deductible provisions. The deductible provision on his boat policy was increased to $ 250. The brokers advised petitioner that, unless there was a catastrophic loss or a loss involving an undetermined potential liability, it would not be advisable for him to file any claims and that, "if he1981 Tax Ct. Memo LEXIS 312">*315 soon presented any further claims on the policies," they would be canceled.
Rather than risk the loss of all his insurance coverage,the petitioner decided to recover as much as possible from the friend who had been operating the boat, and he did not file a claim with the insurance company. He was unable to obtain more than $ 200 from his friend. This reduced his actual loss to $ 642.55. After giving effect to the $ 100 limitation contained in
To support his assertion that "compensated for" does not mean "covered by," petitioner contends: (1) That the everyday meaning of "compensated for" is not "covered by;" (2) that respondent's regulations refer to "any loss * * * not
We agree with the petitioner. The result in this case is controlled by the rationale expressed in our1981 Tax Ct. Memo LEXIS 312">*317 recent court-reviewed opinion in
We view
There are no operative facts which distinguish this case from
The legal issues in both cases are likewise similar. The reasons given in
We discern virtually no distinction between the operative facts or legal issues in this case and
*320 To reflect these conclusions,
Footnotes
1. Pursuant to petitioner's motion, the Court, by Order dated August 12, 1981, vacated and set aside (1) the Decision entered herein on May 18, 1981, and (2) the
Memorandum Findings of Fact and Opinion (T.C. Memo. 1980-550↩ ) filed herein on December 11, 1980.2. All section references are to the Internal Revenue Code of 1954, as amended and in effect for the year 1976, unless otherwise indicated.↩
3.
Sec. 1.165-1(a), Income Tax Regs.↩ (emphasis added by petitioner).4.
Sec. 1.165-1(c)(4), Income Tax Regs.↩ (emphasis added by respondent).5. See and compare
Waxier Towing Co., Inc. v. United States↩ an unreported case ( W.D. Tenn. 1980, 81-2 USTC par. 9541), holding that repair costs suffered by a transporter of petroleum products in order to protect and maintain its insurance coverage were deductible business expenses because of the substantial risks of having its insurance coverage canceled if it made a claim.