under Rule 121, Tax Court Rules of Practice and Procedure. In his view the issue should only be resolved after a trial on the merits, at which time respondent has indicated that he will take a position as to which determination is correct. While we recognize that each case must stand on its own facts, it would be unusual to find a case involving the issue presented herein which is susceptible of disposition by summary judgment. Such cases typically involve a genuine and material factual issue as to the intent of the parties. See 6 Moore, Federal Practice, par. 56.15[3] (2d ed. 1948). Consequently, it has been held, on the particular facts presented, that the District Court erred in disposing of this same issue by summary judgment. See Phinney v. Mauk, 411 F. 2d 1196 (C.A. 5, 1969); United States v. Mills, 372 F. 2d 693 (C.A. 10, 1966). We agree with both Courts of Appeals. We think it would also be erroneous for us to grant petitioners' motion for summary judgment in this case. We will therefore deny it. We observe that the granting of a motion for summary judgment is the exception in Federal practice. The existence of any reasonable doubt as to the facts at issue must result in the denial of the motion. 6 Moore, Federal Practice, par. 56.02[10], p. 2045 (2d ed. 1948). See also United States v. Diebold, Inc., 369 U.S. 654, 655 (1962), where the Supreme Court said: On summary judgment the inferences to be drawn from the underlying facts contained in such materials must be viewed in the light most favorable to the party opposing the motion. *** The value of a trial with full opportunity to observe the parties and their evidence is obvious. This is especially so where the question of intent is present. Firemen's Mut. Ins. Co. v. Aponaug Mfg. Co., 149 F. 2d 359 (C.A. 5, 1945). Alternatively, petitioners have moved for a partial summary judgment. Their purpose is to have the Court shift the burden of proof to the respondent because he has taken inconsistent and alternative positions in this case and in the Stonestreet case. It is argued that respondent's determination in this case is without rational factual or legal basis and is not presumptively correct. The argument is without merit. The law is otherwise. See Leon R. Meyer, 46 T.C. 65, 82-83 (1966), affirmed on this issue 383 F. 2d 883 (C.A. 8, 1967); Estate of Goodall v. Commissioner, 391 F. 2d 775, 781-784 (C.A. 8, 1968), certiorari denied 393 U.S. 829 (1968); Brantley L. Watkins, 53 T.C. 349, 358-359 (1969); M. Lucile Harrison, 59 T.C. 578, 592 (1973); Nat Harrison Associates, Inc., 42 T.C. 601, 617 (1964). Petitioners are also not entitled to a partial summary judgment for another reason. The Note to Rule 121 states that the summary judgment procedure is adapted from rule 56(a) and (b), Federal Rules of Civil Procedure. Rule 56 contemplates a summary judgment for a part or all of the claim made in the prayer for relief in the complaint; it does not contemplate a summary judgment on evidentiary matters en route to that relief. 6 Moore, Federal Practice, par. 56.20[3.-2], p. 2751 (2d ed. 1948). Since petitioners' motion for partial summary judgment -concerns the shifting of the burden of proof, it seems to fall within the ambit of the rule prohibiting summary judgments on evidentiary matters. Accordingly, we conclude that the motion for partial summary judgment must be denied. An appropriate order will be entered. JAMES A. SHANAHAN AND CONSTANCE M. SHANAHAN, Petitioners' home was damaged in 1971 by an earthquake. Daniel J. Clinton, for the petitioners. OPINION IRWIN, Judge: Respondent determined a deficiency of $250 in petitioners' 1971 income tax. The only question remaining for decision is whether petitioners received compensation for a casualty loss within the meaning of section 165(a).1 1 All statutory references are to the Internal Revenue Code of 1954, as amended. under Rule 121, Tax Court Rules of Practice and Procedure. In his view the issue should only be resolved after a trial on the merits, at which time respondent has indicated that he will take a position as to which determination is correct. While we recognize that each case must stand on its own facts, it would be unusual to find a case involving the issue presented herein which is susceptible of disposition by summary judgment. Such cases typically involve a genuine and material factual issue as to the intent of the parties. See 6 Moore, Federal Practice, par. 56.15[3] (2d ed. 1948). Consequently, it has been held, on the particular facts presented, that the District Court erred in disposing of this same issue by summary judgment. See Phinney v. Mauk, 411 F. 2d 1196 (C.A. 5, 1969); United States v. Mills, 372 F. 2d 693 (C.A. 10, 1966). We agree with both Courts of Appeals. We think it would also be erroneous for us to grant petitioners' motion for summary judgment in this case. We will therefore deny it. We observe that the granting of a motion for summary judgment is the exception in Federal practice. The existence of any reasonable doubt as to the facts at issue must result in the denial of the motion. 6 Moore, Federal Practice, par. 56.02[10], p. 2045 (2d ed. 1948). See also United States v. Diebold, Inc., 369 U.S. 654, 655 (1962), where the Supreme Court said: On summary judgment the inferences to be drawn from the underlying facts contained in such materials must be viewed in the light most favorable to the party opposing the motion. *** The value of a trial with full opportunity to observe the parties and their evidence is obvious. This is especially so where the question of intent is present. Firemen's Mut. Ins. Co. v. Aponaug Mfg. Co., 149 F. 2d 359 (C.A. 5, 1945). Alternatively, petitioners have moved for a partial summary judgment. Their purpose is to have the Court shift the burden of proof to the respondent because he has taken inconsistent and alternative positions in this case and in the Stonestreet case. It is argued that respondent's determination in this case is without rational factual or legal basis and is not presumptively correct. The argument is without merit. The law is otherwise. See Leon R. Meyer, 46 T.C. 65, 82-83 (1966), affirmed on this issue 383 F. 2d 883 (C.A. 8, 1967); Estate of Goodall v. Commissioner, 391 F. 2d 775, 781-784 (C.A. 8, 1968), certiorari denied 393 U.S. 829 (1968); Brantley L. Watkins, 53 T.C. 349, 358-359 (1969); M. Lucile Harrison, 59 T.C. 578, 592 (1973); Nat Harrison Associates, Inc., 42 T.C. 601, 617 (1964). Petitioners are also not entitled to a partial summary judgment for another reason. The Note to Rule 121 states that the summary judgment procedure is adapted from rule 56(a) and (b), Federal Rules of Civil Procedure. Rule 56 contemplates a summary judgment for a part or all of the claim made in the prayer for relief in the complaint; it does not contemplate a summary judgment on evidentiary matters en route to that relief. 6 Moore, Federal Practice, par. 56.20[3.-2], p. 2751 (2d ed. 1948). Since petitioners' motion for partial summary judgment -concerns the shifting of the burden of proof, it seems to fall within the ambit of the rule prohibiting summary judgments on evidentiary matters. Accordingly, we conclude that the motion for partial summary judgment must be denied. An appropriate order will be entered. JAMES A. SHANAHAN AND CONSTANCE M. SHANAHAN, Petitioners' home was damaged in 1971 by an earthquake. They received an unsecured loan from the Small Business Administration in 1971 and a portion of the loan was canceled in 1971. Held, the petitioners must reduce the amount of their casualty loss in an amount equal to the cancellation of indebtedness because petitioners were "compensated" by such cancellation within the meaning of sec. 165(a). Daniel J. Clinton, for the petitioners. Melvern Stein, for the respondent. OPINION IRWIN, Judge: Respondent determined a deficiency of $250 in petitioners' 1971 income tax. The only question remaining for decision is whether petitioners received compensation for a casualty loss within the meaning of section 165(a).1 1 All statutory references are to the Internal Revenue Code of 1954, as amended. All of the facts of this case have been stipulated and are so found. James A. and Constance M. Shanahan, husband and wife, filed a joint Federal income tax return for the year 1971. At the time of the filing of the petition herein they resided in Sepulveda, Calif. Hereinafter the Shanahans will be referred to as petitioners. Petitioners' home was damaged on February 9, 1971, as the result of an earthquake. On May 14, 1971, they applied to the Small Business Administration (SBA) for an unsecured disaster loan in the amount of $1,600 and it was subsequently authorized on May 30, 1971. Under the terms of the authorization and pursuant to the Disaster Relief Act of 1970, $1,100 of the loan obligation was canceled during 1971.2 Petitioners claimed a casualty loss deduction in the amount of $2,618 on their 1971 Federal income tax return. That amount represented the damage to petitioners' house less the required $100 exclusion. Respondent reduced the claimed loss in an amount equal to the sum forgiven by the SBA. The issue herein centers on the question of whether petitioners were compensated for a portion of their loss within the meaning of section 165(a)3 so as to require a reduction in the amount of their claimed casualty loss. Petitioners maintain that they were not compensated by the cancellation of indebtedness because it was a gift. Respondent has stated, in prior revenue rulings, that the Government is capable of making a gift and that a gift to disaster victims by relatives is not considered as compensation for purposes of section 165.5 Respondent relies on Rev. Rul. 71-160, 1971-1 C.B. 75,6 which takes the position that the forgiveness of indebtedness provisions 2 The authorization for petitioners' loan contained the statement that “Pursuant to the Disaster Relief Act of 1970, $1,100 of this loan will be cancelled and this amount has been considered in computing monthly payments." 3 SEC. 165. LOSSES. (a) GENERAL RULE.-There shall be allowed as a deduction any loss sustained during the taxable year and not compensated for by insurance or otherwise. ♦ Rev. Rul. 55-609, 1955-2 C.B. 34; Rev. Rul. 57-233, 1957-1 C.B. 60. 5 Rev. Rul. 64-329, 1964-2 C.B.58. • The revenue ruling considered the question of whether the cancellation of indebtedness is compensation in the context of a fact situation where a taxpayer suffered a casualty loss and received an SBA loan in 1968 which was partially forgiven in 1969 after passage of the 1969 Disaster Relief Act. Consequently, the specific issue considered was whether the taxpayer should reduce the amount of his casualty loss for 1968 or report the cancellation as income in 1969. Cf. Herman E. Londagin, 61 T.C. 117 (1973). |