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1. Held: Neither BCCI, S.A., its IOMB, nor
its Los Angeles agency office meets the statutory
requirements for "qualified financial institution"
pursuant to sec. 165(l)(3), I.R.C. Accordingly,
petitioner is not entitled to a casualty loss in
1991.
2. Held, further: In light of the pendency
of petitioner's claim in the liquidation of BCCI,
S.A., petitioner is not entitled to a bad debt
deduction pursuant to sec. 166, I.R.C., for 1991,
the year the funds were seized, because she failed
to prove that the deposit became worthless during
that year.
Carol P. Schaner and Paul W. Raymond, for petitioner.
Louis B. Jack, for respondent.
JACOBS, Judge: Respondent determined the following
deficiencies in petitioner's Federal income taxes:
Year Deficiency
1988 $37,775
1989 2,690
1991 10,258
The issues for decision are: (1) Whether petitioner incurred
a loss on a deposit in a "qualified financial institution" within
the meaning of section 165(l)(3) and, if petitioner's loss does not
come within the purview of section 165(l), then (2) whether
petitioner incurred a deductible nonbusiness bad debt pursuant to
section 166.
Unless otherwise indicated, all section references are to the
Internal Revenue Code in effect for the years under consideration.
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