Federal Tax Research 10th Edition by Steven Gill, Gerald Whittenburg, Roby Sawyers, Debra Sanders, William Raabe

Exercise 24

Willie was tired of cleaning up the messes that his wife, Barbara, made in their house. One morning, he found a crumpled facial tissue on the bathroom vanity, so he disgustedly flushed it down the toilet. Unfortunately, the tissue was wrapped around Barbara's engagement ring, which she had removed the previous evening after cutting her finger while shoveling snow. Is the couple allowed a deductible casualty loss for federal income tax purposes under I.R.C. § 165