T.C. Memo. 2000-33
UNITED STATES TAX COURT
GERALD CHAMALES AND KATHLEEN CHAMALES, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 14839-98. Filed February 3, 2000.
In 1994, Ps contracted to purchase a home located
in the Brentwood Park area of Los Angeles, California,
adjacent to the residence owned by O.J. Simpson.
Shortly thereafter, Nicole Brown Simpson and Ronald
Goldman were murdered, and O.J. Simpson was arrested in
connection therewith. The neighborhood surrounding the
Simpson property became inundated with media personnel
and so-called looky-loos (celebrity-enthralled
sightseers), and this unprecedented attention continued
for many months. On their 1994 Federal income tax
return, Ps took the position that these events
constituted a casualty which permanently devalued their
property and for which they were entitled to a sec.
165(c)(3), I.R.C., casualty loss deduction. R
disallowed the deduction and also determined a sec.
6662(a), I.R.C., accuracy-related penalty on account of
negligence.
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