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find that such harassment, in and of itself, does not
fall under the definition of a casualty loss.
Petitioner’s remedy from the harassment and vandalism
to his peaceful enjoyment would be found in civil or
criminal remedies, but not in the Internal Revenue
Code. [Id.]
Furthermore, this Court has repeatedly held that “physical
damage or destruction of property is an inherent prerequisite in
showing a casualty loss.” Citizens Bank v. Commissioner, 28 T.C.
717, 720 (1957), affd. 252 F.2d 425 (4th Cir. 1958); see also
Chamales v. Commissioner, T.C. Memo. 2000-33. The Court of
Appeals for the Ninth Circuit, to which an appeal in the present
case would lie, has adopted this rule requiring physical damage.
See, e.g., Kamanski v. Commissioner, 477 F.2d 452 (9th Cir.
1973), affg. T.C. Memo 1970-352; Pulvers v. Commissioner, 407
F.2d 838, 839 (9th Cir. 1969), affg. 48 T.C. 245 (1967).
Petitioner has offered no evidence showing any serious
physical damage or destruction to his property. Petitioner made
no attempt to quantify the damage, if any, to his property from
the defecation of his neighbor’s dog. We are not even convinced
that any such damage would have exceeded the $100 threshold of
section 165(h)(1). Accordingly, we find that petitioner is not
entitled to a casualty loss for 1997.
A loss arising from theft generally is allowable as a
deduction under section 165(a) for the taxable year in which the
loss is sustained. Sec. 1.165-8(a)(1), Income Tax Regs. Whether
a theft within the meaning of section 165 has occurred “depends
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