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Lamphere v. Commissioner, 70 T.C. 391, 395 (1978); sec. 1.165-
7(b)(1), Income Tax Regs. The fair market values of the property
must generally be ascertained by competent appraisal. Sec.
1.165-7(a)(2)(i), Income Tax Regs.
If competent appraisal is not available, the actual cost of
repairs to the property damaged is also acceptable as evidence of
the reduction in value if the taxpayer shows that: (a) The
repairs are necessary to restore the property to its condition
immediately before the casualty; (b) the amount spent for such
repairs is not excessive; (c) the repairs do not care for more
than the damage suffered; and (d) the value of the property after
the repairs does not as a result of the repairs exceed the value
of the property immediately before the casualty. Lamphere v.
Commissioner, supra at 395-396 (1978); sec. 1.165-7(a)(2)(ii),
Income Tax Regs.
Petitioners argue that they have substantiated a casualty
loss in the total amount of $9,571.37, based upon the following
items:
Repairs & installation related to carpeting $3,819.00
Repairs & installation of new cabinets 1,352.37
Color television 300.00
Sod & mulch damage 100.00
Loss of trees 3,750.00
Pool pump 250.00
Respondent concedes that petitioners paid Clarence Walker
$3,819 to repair water damage to the carpet and tile in their
family room. Respondent also concedes that petitioners paid
Lawton Carter $1,352.37 to install storage cabinets in
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