Carpenter v. Commissioner T.C. Memo.

1966-228 (1966)

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Nature of the Case

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Facts

P owned a diamond engagement ring. She placed the ring in a water glass of ammonia for the purpose of cleaning it. The glass containing the ring was left 'next' to the kitchen sink. While her husband was washing dishes, he inadvertently 'picked up the glass and emptied its contents down the' sink drain. He then activated the garbage disposal and severely damaged the ring. The ring was recovered and taken to a jeweler for appraisal. His appraisal was that the ring was a total loss. The ring consisted of a platinum mounting, one diamond of .76 carat, and four small diamonds of undisclosed weight. The fair market value of the mounting was $235, that of the large diamond $725, and the aggregate of four small diamonds $50, or an aggregate fair market value of $1,010. The fair market value of the mounting immediately after being placed in the disposal unit was $5, that of the large diamond zero, and the aggregate of the small diamonds $25, or a total aggregate fair market value of $30. P had the sheer audacity to deduct the $1010 as a casualty loss. D disallowed it and P petitioned the court.