Valuable home in nice suburban neighborhood

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Reference no: EM133613974

Question

Alfred Kinsey owns a once valuable home in a nice suburban neighborhood. Recently a fire swept through his neighborhood but missed his home. How-ever, two local Realtors tell Alfred that his property is now worth $500,000 less than it was before the fire because of the overall degradation the fire caused to his neighborhood. The Realtors also noted that some scientists have been quoted in the local paper as saying the fire may be part of a continuing effect of global climate change and that it is capable of repetition. Assuming the ten percent threshold is not at issue, is Alfred's loss deductible under the following circumstances? A national real estate developer is buying up the burned out lots and plans to build low income housing in the area surrounding Alfred's home.

Reference no: EM133613974

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