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8. Notice of Deficiency
On September 18, 1995,6 respondent mailed a notice of
deficiency to petitioner determining deficiencies for her 1988,
1989, and 1991 tax years. The notice of deficiency disallowed the
1991 section 165(l) deduction and resultant net operating loss
carrybacks.
OPINION
Issue 1. Loss Arising From Qualified Financial Institution
Petitioner, along with her deceased husband, lost funds on
deposit in the infamous BCCI fiasco and claimed a casualty loss
under section 165(c)(3). The gist of this case is whether BCCI,
S.A. is a "qualified financial institution" within the meaning of
section 165(l)(3).
Section 165(l) provides special treatment to certain losses
caused by deposits in insolvent financial institutions. See
Fincher v. Commissioner, 105 T.C. 126 (1995). If its statutory
prerequisites are met, section 165(l) permits individuals to treat
a loss on a deposit as a casualty loss in the year the loss amount
6 On Oct. 5, 1995, respondent mailed a duplicate notice
of deficiency to petitioner for tax years 1988, 1989, and 1991.
The second notice of deficiency corrected a typographical error
in the date of the original notice of deficiency (erroneously
dated Sept. 18, 1996). Apart from the dates, the two notices are
identical.
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