Dr. Thomas P. Foltz and Eleanor Foltz v. United States

MATTHES, Chief Judge.

This is an appeal by the government from a decision of the district court, after trial without a jury, that taxpayer Foltz1 had sustained a deductible loss under the Internal Revenue Code of 1954 322 F.Supp. 414. The pertinent Code Section, 26 U.S.C. § 165(a), provides that “[t] here shall be allowed as a deduction any loss sustained during the taxable year and not compensated for by insurance or otherwise.” Also of some relevance are subsections (1) and (2) of Tr. Reg. 1.165-3 (b):(1) Except as provided in subpara-graph (2) of this paragraph, the loss incurred in a . . .…