- 19 - 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.Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
Last modified: May 25, 2011