Under § 165(c)(3) (deductions for losses related to personal property), X may deduct, subject to limitations, the loss of value in his home when a vacant lot in the adjoining neighborhood is discovered to be a toxic waste dump.

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Under § 165(c)(3), deductions for losses related to personal property are generally limited to those arising from theft, casualty, or disaster. A loss in home value due to the discovery of a nearby toxic waste dump does not fall under these categories and is typically not deductible.

Under § 165(c)(3) (Deductions for Losses Related to Personal Property)