Rev. Rul. 59-277

In George L. Buist et ux. v. United States, 164 Fed. Supp. 218, the United States District Court for the Eastern District of South Carolina held that damages to a house caused by an infestation of termites sometime between September of one year and June of the succeeding year constituted a deductible casualty loss under section 165 of the Internal Revenue Code of 1954. Following the decisions in Martin A. Rosenberg v. Commissioner, 198 Fed. (2d) 46, and Joseph Shopmaker et al. v. United States, 119 Fed. Supp. 705, the District Court found that the requisite degree of "suddenness," a cardinal element in these decisions, had been established. It distinguished, however, the cases of United States v. Betty Rogers et al., 120 Fed. (2d) 244; Charles J. Fay et al. v. Helvering, 120 Fed. (2d) 253; and Leslie C. Dodge et ux. v. Commissioner, 25 T.C. 1022. In the latter cases the termite infestation and subsequent damage occurred over periods of several years. The Internal Revenue Service will follow the rule of the Buist, Rosenberg, and Shopmaker decisions only in those cases where the facts are substantially the same. In other cases, the rule announced in the Fay, Rogers, and Dodge cases will continue to be applied.

Consideration will be given to the effect of this Revenue Ruling on previously published positions of the Service and the publication of a more comprehensive ruling at a later date.

¹ Based on Technical Information Release 142, dated March 13, 1959.