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retrofitting the foundation to get the postearthquake loss in
value of petitioner's home.
Respondent argues that Halpin improperly used a cost-of-
repair method. We disagree. Halpin valued petitioner's home by
comparing its fair market value before and after the earthquake.
An appraiser may consider repair cost estimates in deciding
postcasualty fair market value. Pfalzgraf v. Commissioner, 67
T.C. 784, 788 (1977); Abrams v. Commissioner, T.C. Memo.
1981-231. In Abrams, an appraiser used repair estimates to
confirm his estimate of postearthquake fair market value, which
he based on the market method. In Pfalzgraf, we held that, in
estimating the amount of a casualty loss, an appraiser may
consider the cost of repairing property to restore it to its
precasualty status. 67 T.C. at 788. We rejected the taxpayers’
method of estimating their loss based on the difference between
the prefire fair market value and the postfire fair market value
because the taxpayers’ method included losses or expenses not
caused by the fire. Id. at 789-791.
Respondent contends that Abrams and Pfalzgraf do not stand
for the proposition that repair estimates may be used to
calculate a casualty loss. We disagree. The taxpayer's expert
in Abrams concluded that a prospective buyer would discount the
value of the damaged building by the cost of needed repairs. He
subtracted the estimated cost of repairs from the precasualty
fair market value. Similarly, Halpin estimated the loss in value
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