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exists with respect to a claim of reimbursement of a loss is
a question of fact to be determined upon an examination of
all facts and circumstances. Whether or not such
reimbursement will be received may be ascertained with
reasonable certainty, for example, by a settlement of the
claim, by an adjudication of the claim, or by an abandonment
of the claim. * * * [Emphasis added.]
In 1993, petitioner filed suit against the airport seeking
compensation for the loss of her property. In 1995, her suit was
dismissed with prejudice. Her efforts to obtain reimbursement
for her loss subsequent to 1989 are clear. Petitioner obviously
felt that she had a reasonable prospect of collecting a judgment
or other compensation for her loss during or after 1989. Not
until 1995, when her suit was dismissed with prejudice, did
petitioner's loss become "sustained" within the meaning of
section 165 because, only at that time, could it be "ascertained
with reasonable certainty" that petitioner would not receive
compensation for her loss. It follows that petitioner did not
"sustain" (as defined in section 1.165-1(d)(2)(i), Income Tax
Regs.) a casualty loss in 1989, as required under section 165(a)
in order for such loss to be deductible in that year. Respondent
is, therefore, sustained on this issue.
The fifth issue is whether petitioner is liable for the
addition to tax under section 6651(a)(1) for failure to file
timely a Federal income tax return for 1989, 1990, 1991, and 1992
and the penalty under section 6662(a) for negligence or
intentional disregard of rules or regulations.
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