Quimbee logo with url
From our private database of 15,100+ case briefs...

Chamales v. Commissioner

United States Tax Court
79 T.C.M. 1428, T.C. Memo 2000-33 (2000)


Facts

On June 2, 1994, Gerald and Kathleen Chamales (plaintiffs) opened escrow for the purchase of property in the Brentwood Park neighborhood of Los Angeles, California. On June 12, 1994, O. J. Simpson, a famous neighbor of the Chamaleses, was accused of murder. Simpson’s sudden notoriety brought outsiders and increased traffic into the neighborhood, threatened to decrease neighborhood real-estate values, and led to minor damage to the property as a result of the outsiders’ presence in the neighborhood. The Chamaleses considered canceling their escrow but decided to proceed with their real-estate closing on June 29, 1994, to avoid liability for cancellation. The Chamaleses estimated that their property lost 30 percent of its value due to the Simpson incident. On their 1994 federal tax return, the Chamaleses deducted this Simpson-related loss of value as a casualty loss. The commissioner of internal revenue (commissioner) (defendant) determined that the decrease in the value of the Chamaleses’ property was not a tax-deductible casualty and disallowed the deduction. The commissioner also imposed an accuracy-related penalty on the Chamaleses for understating their tax liability. Between 1994 and 1999, the Chamaleses and their neighbors continued to invest significant sums of money to maintain and improve their properties, even though low levels of Simpson-related disruption continued in the neighborhood. The Chamaleses petitioned the United States Tax Court for a redetermination.

Rule of Law

Issue

Holding and Reasoning (Nims, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.

  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.

Here's why 287,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 15,100 briefs, keyed to 204 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.