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properties’ adjusted bases (i.e., by receipts) or their fair
market values immediately before the loss. Therefore, petitioner
is not entitled to a deduction for a theft loss.
Generally, damages resulting from animals and insects are
not deductible because they occur not from a sudden event but
rather gradually over time, unless it can be shown that the
destruction was occasioned by a sudden invasion that occurred in
a relatively short time (i.e., 1-3 months or 1 year). Cf.
Rosenberg v. Commissioner, supra at 50; Fay v. Helvering, 120
F.2d 253 (2d Cir. 1941), affg. 42 B.T.A. 206 (1940); United
States v. Rogers, 120 F.2d 244, 246 (9th Cir. 1941).
The destruction of petitioner’s properties that was caused
by animals’ entering the wall’s opening is not a type of “sudden,
unexpected, or unusual cause” within the definition of a
casualty. Without evidence to the contrary, the Court surmises
that petitioner’s damages were not occasioned by a sudden
invasion of raccoons and birds within a short period of time but
rather occurred gradually over time (i.e., from 1998-2002).
Additionally, the damages resulting from the inadequacy of the
structure are neither unexpected nor unusual. Therefore, they
are not deductible, and accordingly, respondent’s determination
is sustained.
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