the Internal Revenue Code of 1954. The court’s holding The court held that the petitioners were correct in deducting the aggregate fair market value of the ring from their income tax return as a casualty loss under §165(a) and (c)(3) of the Internal Revenue Code of 1954. The court’s reasoning The court relied on the fact that William’s “testimony and demeanor” led the court to believe that William was not the type of person that deliberately would place the ring in the garbage disposal. Therefore, the court concluded that William placed the original ring in the garbage disposal accidentally. Accordingly, the court stated that the damage to the ring resulted from the “destructive force of the disposal coupled with the accident or mischance of placing it therein; that because this is so, the damage must be said to have arisen from fortuitous events over which petitioners had no control.” Under the facts presented to the court, the court reasoned that the amount of the loss should not be reduced by the value of the second ring. The court explained that William was not an insurer of the ring, and therefore it was difficult to conclude that Nancy had any claim against William for her loss. The court further explained that William merely made another gift to Nancy, as an act of repentance or contrition, and not as a compensatory action. References External links United States Tax Court cases United States taxation and revenue case law 1966 in United States case law