Pacific-Timber Industries, Inc. is a global supplier of timber, performance fibers and wood products. It was founded in 1926 in Washington. Currently, Pacific-Timber has approximately 300 shareholders and is headquartered in Spokane, Washington. It is committed to sustainable management of its forests, and it routinely plants young trees to reforest its properties across the Pacific Northwest. Two years ago, Pacific-Timber reforested a clear-cut area along the Snake River by planting nursery-grown seedlings. Pacific-Timber capitalized the cost of preparing the Snake River site for reforestation and the seedling planting costs two years ago. Unfortunately, a severe drought killed 85% of the seedlings last year. Consequently, Pacific-Timber had to replant the Snake River area in this year. Insurance did not cover any of the losses incurred by the company. Laurel George, controller for Pacific-Timber, has asked for advice on whether the company can deduct the costs it incurred to replant the clear-cut area as a casualty loss this year. Prepare a memorandum explaining your conclusions. Make certain to include references to primary authority, cite them, and explain their relationship to your case. Use only the Internal Revenue Code, Treasury regulations and IRS rulings for your research.