Pulvers v. Commissioner
407 F.2d 838 (9th Cir. 1969)

  • Pulvers owned a home near a mountain. A landslide ruined three of his neighbors' homes, but did no damage to Pulvers' home.
  • Pulvers noted that the resale value of his home decreased because no one was willing to buy a house that was in a landslide zone. When he filed his taxes, he claimed a deduction on the loss of value of his home as a casualty loss.
  • The IRS denied the deduction. Pulvers appealed.
  • The Tax Court affirmed, Pulvers appealed.
    • The Tax Court found that Pulvers had not incurred an actual loss, he only suffered a hypothetical loss or a mere fluctuation in value.
  • The Appellate Court affirmed.
    • The Appellate Court looked to 26 U.S.C. 165(c)(3), which lays out the specific kinds of losses that are deductible, and found that it lists a number of specific losses like fire and theft, and also included a clause for "other casualty."
      • The Court used the canon of in para materia and found that "other casualty" meant things that caused a similar type of physical damage loss (such as earthquakes), and should not be read to include hypothetical losses such as Pulvers was claiming to have incurred.
      • Pulvers argued that the landslide was caused by a storm, and storms are included under 165(c)(3), but the Court disagreed.
    • The Court found that Pulvers' property had not been damaged by the storm, or anything else, so he gets no deduction.