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petition for certiorari. HTC Industries, Inc. v. Perry,
Secretary of Defense, 513 U.S. __ (1994).
It is well established that normally if a taxpayer is
willing to pursue the claim in court, "there is as a matter of
fact sufficient chance of at least part recovery to justify that
taxpayer in deferring the claim of a loss deduction * * * until
the litigation in question is concluded." Estate of Scofield v.
Commissioner, 266 F.2d 154, 159 (6th Cir. 1959), affg. in part,
revg. in part 25 T.C. 774 (1956); see Dawn v. Commissioner, 675
F.2d 1077, 1078 (9th Cir. 1982), affg. T.C. Memo. 1979-479; Gale
v. Commissioner, 41 T.C. 269, 276 (1963).
In our judgment petitioners would not have pursued the claim
against the Army as vigorously and aggressively as they did
unless they believed they could recover something. That they
have not had any success does not objectively negate the value of
their claim to them. In fact, their pursuit of the claim through
the Board of Appeals, the Federal Circuit, and even the Supreme
Court indicates their belief, at least as late as 1994, that they
held a valuable asset.
We find that the debt in question did not in fact become
worthless in 1990. In the circumstances, we need not consider
whether the loss was a business or nonbusiness bad debt.
Due to concessions by the parties,
Decision will be entered
under Rule 155.
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