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Pulvers v. Commissioner, supra, stated: “Section 165 of the IRC
covers only casualty losses arising from physical damage caused
by one of the enumerated casualties or by other, similar
casualties”, and the Court of Appeals affirmed.
In Caan v. United States, 83 AFTR 2d 99-1640, 99-1 USTC par.
50,349 (C.D. Cal. 1999), the District Court dismissed for failure
to state a claim the complaint of taxpayers alleging facts nearly
identical to those at issue here. The Caans, residents of
Brentwood Park, argued that they were entitled to a section
165(c)(3) casualty loss deduction for the decline in market value
and permanent buyer resistance to which they asserted their
property became subject as a result of the “‘O.J. Simpson double
murders’”. Id. at 99-1641 n.2, 99-1 USTC par. 50,349, at 87,829
n.2. The court, however, reiterated that “the Ninth Circuit only
recognizes casualty losses arising from physical damage caused by
enumerated or other similar casualties” and held that “Because
the Caans have not alleged any physical damage to their property
due to the murders and subsequent media frenzy, they have not
alleged a casualty loss that is a proper basis for a deduction.”
Id. at 99-1641, 99-1 USTC par. 50,349, at 87,829.
Given the above decisions, we conclude that petitioners here
have failed to establish that their claimed casualty loss is of a
type recognized as deductible for purposes of section 165(c)(3).
They have not proven the extent to which their property suffered
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