DocketNumber: Docket No. 97377.
Citation Numbers: 1940 BTA LEXIS 1038, 42 B.T.A. 206
Judges: Murdock
Filed Date: 6/25/1940
Status: Precedential
Modified Date: 1/12/2023
*1038 DEDUCTIONS - LOSS - OTHER CASUALTY. - Damage to a residence by termites was not a loss from other casualty deductible under section 23(e)(3) of the Revenue Act of 1934.
*206 OPINION.
MURDOCK: The Commissioner determined a deficiency of $1,740.29 in the income tax of the petitioners for the calendar year 1935. The only issue for decision is whether or not a loss resulting from damage *207 to the residence of the petitioners caused by termites is deductible under section 23(e)(3) of the Revenue Act of 1934. The Board adopts the stipulation of the parties as its findings of fact.
The petitioners reside at Dongan Hills, Staten Island, New York. They completed the construction of their residence there about December 10, 1913. Two frame porches were attached to the residence. The petitioners discovered in September 1935 that termites had destroyed the columns and horizontal beams which supported the roofs of the porches. This damage rendered the porches unsafe and all material forming a part of the porches had to be burned. The*1039 amount of the loss has been stipulated. The parties have included in their stipulation two bulletins issued by the Department of Agriculture on the subject of damage by termites.
Section 23(e)(3) of the Revenue Act of 1934 allows a deduction for losses sustained during the taxable year and not compensated for by insurance or otherwise of property not connected with the trade or business, "if the loss arises from fire, storms, shipwreck, or other casualty, or from theft." The petitioners contend that the rule of
The only case directly in point which has come to our attention is that of
1. A fatal or serious accident or disaster; accidental death or disablement; as, a casualty at a fire. 3. That which occurs by chance; chance. 4.
The synonyms given are accident and hazard.
The contention of the petitioner does not fail to find some support in the definitions and authorities on the meaning of this word. The element of chance is present. The attack was unexpected and somewhat unusual. No human agency contributed to it. The pamphlets issued by the Department of Agriculture indicate, however, that damage by termites may be prevented by proper construction. Cf. *1042 The attack was not in the nature of an inevitable accident which could not be foreseen or guarded against successfully. The destructive process was slow. We conclude, but not without some doubt, that the loss here in question did not result from a casualty within the meaning of that term as used by Congress in section 23(e)(3).