CHAMALES V. COMMISSIONER
T.C. Memo 2000-33
NATURE OF THE CASE: Chamales (P) challenged an IRS (D) determination of a tax deficiency
in petitioners' 1994 taxable year in the amount of $291,931 pursuant to I.R.C. 165, and
respondent's determination of an accuracy-related penalty of $58,386 for 1994 pursuant to
I.R.C. 6662(a).
FACTS: P are married and resided in Los Angeles, California. They purchased a property in
Brentwood Park, at 359 North Bristol Avenue. O.J. Simpson (Simpson) owned and resided at the
property located directly west of and adjacent to that being purchased by P. Simpson's
address was 360 North Rockingham Avenue. During the escrow period Nicole Brown Simpson and
Ronald Goldman were murdered. The Brentwood Park neighborhood surrounding the Simpson
property became a media circus inundated with media personnel and equipment and with
individuals drawn by the area's connection to the events. Police were summoned to the area
for purposes of controlling the crowds, and barricades were installed at various Brentwood
Park intersections to restrict traffic. Ps purchased their residence on for $2,849,000.
Their real estate agent indicated that a decrease in value of 20 to 30 percent. Ps talked to
a certified public accountant. In the course of preparing this return, Kitay discussed the
possibility of claiming a deduction for casualty loss. After researching the feasibility,
Kitay spoke with two area real estate agents regarding the amount by which petitioners'
property had decreased in value. An expert appraisal was not obtained. An explanatory
supplemental statement labeled 'Casualty Loss' was attached to the return. At the time Ps
purchased their property, they were aware that the existing home required remodeling and
repair. In the fall of 1994, Ps demolished most of the house. Reconstruction cost $2
million. This reconstruction was completed in December of 1996, and Ps moved into the
residence. As of 1999, the area surrounding the former Simpson home was no longer inundated
with media personnel or equipment.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
Get
free access to the entire content for Mac, PC or Online
for 2-3 days and free samples
of all kinds of products.
for 2-3 days and free samples of all kinds of products.
https://bsmsphd.com
© 2007-2016 Abn Study Partner
No comments:
Post a Comment