Jennifer L. Mandel and Eric P. Mandel v. Commissioner of Revenue

Summary

The Minnesota Supreme Court affirmed the tax court's determination that the Mandels' post-casualty appraisal was not a competent appraisal under Treasury Regulation § 1.165-7(a)(2)(i). The court held that the appraisal improperly included future improvements and temporary buyer resistance to water-damaged property in calculating the casualty loss. The court also upheld summary judgment for the Commissioner of Revenue.

Holdings

1. A competent appraisal for purposes of Treas. Reg. § 1.165-7(a)(2)(i) must value the property in accordance with the applicable Treasury regulations. An appraisal is not competent when it includes future capital improvements that do not repair existing casualty damage or temporary buyer resistance arising from psychological stigma associated with recently water-damaged property.
2. The Tax Court properly granted summary judgment to the Commissioner because there were no genuine issues of material fact, the appraisal was not competent under the governing regulation, and the Mandels lacked evidence supporting their claimed casualty-loss deduction after the appraisal was excluded.

Questions Presented

1. Whether the Mandels' post-casualty appraisal was a competent appraisal under Treas. Reg. § 1.165-7(a)(2)(i).
2. Whether the Minnesota Tax Court properly granted summary judgment to the Commissioner.

Disposition

affirmed