- 16 -
physical damage, and their attempt to base a deduction on market
devaluation is contrary to existing law.
With respect to physical damage and assuming arguendo that
petitioners’ loss stemmed from an occurrence that could properly
be deemed a casualty, they would be entitled to a deduction for
physical harm to their property. Nonetheless, although
petitioners attached to their return a list of minor instances of
physical damage and mentioned several other items at trial, they
have neither offered evidence of the monetary value of nor
provided any substantiation for such losses. We therefore have
no basis for determining what, if any, portion of the claimed
deduction might be allowable, and we cannot sustain a $751,427
deduction on the grounds of damage to a lawn or a sprinkler
system.
As regards decrease in property value, petitioners’ efforts
to circumvent the established precedent repeatedly rejecting
deductions premised on market fluctuation, through reliance on
Finkbohner v. United States, 788 F.2d 723 (11th Cir. 1986), are
misplaced. In Finkbohner v. United States, supra at 727, the
Court of Appeals for the Eleventh Circuit permitted a deduction
based on permanent buyer resistance in absence of physical
damage. The Finkbohners lived on a cul-de-sac with 12 homes, and
after flooding damaged several of the houses, municipal
authorities ordered 7 of the residences demolished and the lots
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011