## Facts

- Justin Popa, a U.S. citizen, lived in South Vietnam in 1975 while employed as vice president and general manager of a foreign subsidiary of a U.S. corporation.
- On April 26, 1975, Popa left Saigon for a business trip to Bangkok, taking only a suitcase and briefcase and leaving his remaining personal property at his rented home (including furniture, clothing, appliances, books, and food).
- Within days, the South Vietnamese government collapsed and U.S. nationals were ordered to evacuate; Popa could not return to Vietnam.
- Popa had no reasonable prospect of recovering the property or its value; the property was uninsured.
- On his 1975 federal income tax return, Popa claimed a $12,691 casualty-loss deduction under I.R.C. § 165(c)(3) for the abandoned personal property and attached an itemized list.
- The IRS issued a notice of deficiency for 1975, disallowing the casualty-loss deduction; after other matters were conceded, the casualty-loss deduction was the only issue tried.

## Issues

1. Whether the loss of Popa’s personal property in Saigon, made unrecoverable by the sudden collapse of the South Vietnamese government and evacuation of U.S. nationals, was an “other casualty” deductible under I.R.C. § 165(c)(3).
2. Whether a taxpayer’s inability to prove the precise mechanism of destruction or taking bars a casualty-loss deduction when extraordinary conditions make such proof practically unobtainable.
3. Whether the loss was sustained in the 1975 tax year for purposes of § 165.

## Decision

- The Tax Court held for Popa and allowed the § 165(c)(3) casualty-loss deduction.
- The court found the rapid evacuation and seizure of Saigon to be a sudden, unexpected, and unusual event comparable to the casualties enumerated in § 165(c)(3).
- The court ruled that Popa’s inability to specify the exact manner his property was destroyed or pilfered did not preclude the deduction given the evacuation and inability to return.
- The court accepted that the loss was sustained in 1975, when Popa’s reasonable prospect of recovery ended.

## Legal Principles

- Under I.R.C. § 165(c)(3), an individual may deduct a loss of personal-use property arising from “fire, storm, shipwreck, or other casualty, or from theft.”
- “Other casualty” includes events sharing the defining characteristics of enumerated casualties—suddenness, unexpectedness, and unusualness—and is not limited to natural disasters.
- Sudden political and military upheaval that abruptly deprives a taxpayer of access to property and makes recovery impossible may qualify as an “other casualty.”
- When conditions surrounding a loss make direct proof of the precise mechanism of loss impracticable, circumstantial evidence may suffice to establish that a casualty occurred and caused the loss.
- A casualty loss is sustained in the taxable year in which the loss becomes fixed by identifiable events and the taxpayer has no reasonable prospect of recovery.

## Conclusion

The Tax Court treated the fall of Saigon and the compelled evacuation of U.S. nationals as an “other casualty” under § 165(c)(3), permitting a casualty-loss deduction for uninsured personal property left behind when the taxpayer could not return and had no reasonable prospect of recovery, even without proof of the exact manner the property was destroyed or taken.


Popa v. Commissioner, 73 T.C. 130 (1979)