1984)[1] was a case in which the United States Court of Appeals for the Sixth Circuit held that taxpayers are allowed to claim deductions for economic detriments which are a loss and not compensated for by insurance or otherwise regardless whether the property was insured or not.

This case is relevant both to personal taxpayers as well as businesses and allows them to make an informed decision about whether or not to pursue insurance indemnification for their loss.

Following this decision, the indemnification can be compared to subsequent insurance effects as well as the potential savings as a result of a tax deduction.

Plaintiff taxpayer had an undamaged boat and a friend who is a bad captain.

The Hills court rejected Kentucky and held that Section 165(a) allows a deduction for an economic detriment that (1) is a loss, and (2) is not compensated for by insurance or otherwise.

The court in the present case followed the reasoning in Hills and adopted a plain English interpretation of 26 U.S.C.

The court is avoiding two undesirable consequences of the Kentucky Utilities rule.

There are many valid reasons for not involving insurance companies and the tax law should not work against them.