BEFORE THE STATE BOARD OF EQUALIZATION
,OF THE STATE OF CALIFORNIA
In the Matter of the Appeal of
JOHN A. AND
ELIZABETH J. MOORE
John A. Moore, in pro. per.
Crawford H. Thomas
Karl F. Munz
O P I N I O N
This appeal is made pursuant to section 18594 of the
Revenue and Taxation Code from the action of the Franchise Tax
Board on the protest of John A. and Elizabeth J. Moore against a
proposed assessment of additional personal income tax in the
amount of $390.30 for the year 1968.
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Appeal of John A. and Elizabeth J. Moore
The issue presented is. whether respondent properly
disallowed a casualty loss deduction.
In 1965 appellants purchased real estate consisting of
2.5 acres of land and a home near Santa Ynez, California, for
$110,000.00. Approximately two-thirds of the acreage consisted
of farm land. Appellants resided there until some time in 1973.
They acquired the farm land primarily as an investment, intending
to resell it at a profit. Appellants were not, however, engaged
in the business of farming. They were retired and derived income
in the form of dividends, interest and capital gains from the sale
of securities and real estate.
Appellants placed at least 11 acres of the farm property
for sale in 1968 through a real estate broker. Prior to 1969, at
least one offer to buy the 11 acres for $3,200.00 per acre was
In January 1969, a prolonged and heavy rainstorm
caused severe flood damage to property in the Santa Ynez Valley.
As a result of alleged damage to their property, appellants claimed
a $3,900.00 casualty loss on their 1968 state income tax return.
Specifically, they claimed $1, ZOO. 00 for loss of “trees” and
!$2,800.00 for loss of “I.6 acres - top soil. “i/ Respondent’s
denial of the deduction on the basis that the casualty loss had
not been substantiated gave rise to this appeal.
Appellants contend that all 1.6 acres of the farm ,land
were damaged by the storm. However, they principally rely upo