Read the following cases in addressing the following questions:
Henry Hills, 76 TC 484
Henry Hills v. Commissioner, 691 F2d 997; 82-2 USTC ¶9669; 50 AFTR2d 82-6070
Miller v. Commissioner, 733 F2d 400; 84-1 USTC ¶9451; 53 AFTR2d 84- 1252
a. What court decided each case?
b. What are the material facts in each of these cases? What facts are not material?
c. What is the Code section at issue in each of these cases? What is the specific issue the facts raise about the Code section language?
d. In each case, what was the court's conclusion? List three different sources the courts used in arriving at this conclusion. How did these sources support the courts' conclusions? How did the courts deal with previous court cases?
e. Using the cases cited previously, the Internal Revenue Code and the Treasury regulations, address the following research question.
Corporation X suffered $10,000 in flood damage to its office building. Although the damage was covered by the company's property and casualty insurance policy, the company decided not to file an insurance claim for the loss because it feared the policy might be canceled in the future as a result of making this small claim for losses. The company would like to take a deduction for the $10,000 on its tax return. The President asks your advice.
f. How are the facts in Corporation X's situation different from those in the cases you read? Are the differences material?