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cannot identify the specific amount that petitioner spent in
constructing the structure. Although petitioner claims $400,000,
the record, including the report submitted by petitioner’s
expert, indicates that petitioner spent, or should have spent, no
more than $253,000. After having spent this money constructing
the structure, petitioner let the structure stand unused for
nearly 15 years, doing nothing with it except closing it off to
prevent vandalism. Petitioner then received $719,480 in cash
(and substantial interest payments thereafter) and a note for
$2,030,400 for the sale of the entire 225-235 Boston Avenue
property, at a time when the record, including petitioner’s own
testimony that one of the walls collapsed prior to the 1988 sale,
strongly supports the inference that the garage structure was
virtually worthless prior to the sale.12 These difficulties in
identifying the amount and time of petitioner’s loss suffice to
preclude petitioner’s claim of a casualty loss under section
165(c)(3) and (h). There are other hurdles to allowance of a
casualty loss that petitioner has not surmounted. A casualty
12 Even if petitioner were entitled to a casualty loss, he
would be restricted to the lesser of adjusted basis or value
prior to the casualty--the garage was not part of a trade or
business because it had never been placed in service. Helvering
v. Owens, 305 U.S. 468 (1939); sec. 1.165-7(b)(1)(ii), Income Tax
Regs. The evidence in the record that the garage structure was
virtually worthless when the 225-235 Boston Avenue property was
sold, which is even less than the $253,500 cost of construction
figure imputed by petitioner’s expert, would leave petitioner
short of his goal of proving entitlement to a casualty loss.
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