Perry H. Kay, Sr. - Page 18

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          casualty loss amount on Form 4684, Casualties and Thefts,                   
          applying the fair market value approach.  On Form 4684,                     
          petitioner reported the fair market value of the property before            
          and after the casualty to be $60,000 and $52,870, respectively.             
          The $7,130 difference in the fair market values reported was                
          first reduced by $100, then further reduced by $1,888.81, 10                
          percent of the adjusted gross income shown on the return.                   
          Thereby, petitioner computed a casualty loss of $5,151.19.  No              
          insurance reimbursement was reported on the Form 4684.                      
               A.  Fair Market Value Approach                                         
               At trial, petitioner offered no evidence to substantiate the           
          fair market values reported on Form 4684.  Petitioner did present           
          a Uniform Residential Appraisal Report (report), which estimated            
          the market value of petitioner’s residence, as of October 10,               
          1998, to be $53,000.  The report makes no mention of the damage             
          claimed by petitioner, nor states that the appraised amount was             
          based on a value before or after the date of the storm.  Because            
          the appraised value was determined as of October 10, 1998,                  
          approximately 1 month after the storm and before any repairs were           
          made, we believe the $53,000 figure represents the fair market              
          value of the property taking into consideration any damage                  
          resulting from the storm.6  Since no evidence of the fair market            

               6    The Uniform Residential Appraisal Report states that              
          Oct. 10, 1998, was the date of inspection of the property.                  

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