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Commissioner, 3 T.C. 1, 3 (1944) or a “sudden, cataclysmic, and
devastating loss”, Popa v. Commissioner, 73 T.C. 130, 132 (1979).
Conversely, the term “excludes the progressive deterioration of
property through a steadily operating cause.” Fay v. Helvering,
120 F.2d 253 (2d Cir. 1941), affg. 42 B.T.A. 206 (1940).
Petitioner described his loss at trial, saying: “It’s a
loss of the money I had invested in the house in that town,
because the police forced me to leave the town. So it’s
deprivation of rights, and loss.” In sum, petitioner argues that
because of the hostility and racism directed at him by the
citizens and police of Coos Bay, he is entitled to a casualty
loss deduction for the alleged decline in value of his house.
Petitioner’s asserted loss is not the type of loss
contemplated by section 165(c)(3). As stated above, section
165(c)(3) contemplates a sudden or cataclysmic event. Harassment
does not qualify as a sudden or cataclysmic event. In
Kalbfleisch v. Commissioner, T.C. Memo. 1991-61, the taxpayer
claimed a casualty loss with regard to his rent expense on
account of harassment he endured from his neighbors and fellow
workers. We denied a casualty loss deduction because there was
no sudden identifiable outside force:
The claimed casualty loss with regard to petitioner’s
rent expense does not satisfy the statutory requirement
that there be a sudden identifiable outside force * *
* . Assuming that petitioner’s allegations of
continuous harassment by neighbors and fellow workers
deprived him of peaceful usage of his apartment, we
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