Carl W. and Barbara H. Patterson - Page 11

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          contend that a loss in the amount of $55,000 was "sustained" in             
          1992.  Respondent contends to the contrary.  We agree with                  
          respondent for the following reasons.                                       
               In order to be deductible under section 165, "a loss must be           
          evidenced by closed and completed transactions, fixed by                    
          identifiable events, and * * * actually sustained during the                
          taxable year."  Sec. 1.165-1(b), Income Tax Regs; see also sec.             
          1.165-1(d)(1), Income Tax Regs.  A loss is not sustained during             
          the taxable year if "there exists a claim for reimbursement with            
          respect to which there is a reasonable prospect of recovery".               
          Sec. 1.165-1(d)(2)(i) and (3), Income Tax Regs.  In this event,             
          the deductibility of a loss is postponed until the taxable year             
          in which "it can be ascertained with reasonable certainty whether           
          or not such reimbursement will be received."  Sec. 1.165-                   
          1(d)(2)(i), Income Tax Regs; see sec. 1.165-1(d)(3), Income Tax             
          Regs.  "Whether a reasonable prospect of recovery exists with               
          respect to a claim for reimbursement of a loss is a question of             
          fact to be determined upon an examination of all facts and                  
          circumstances."  Sec. 1.165-1(d)(2)(i), Income Tax Regs.                    
          Petitioners bear the burden of proof on this question of fact.              
          Rule 142(a); INDOPCO, Inc. v. Commissioner, supra at 84; Welch v.           
          Helvering, supra at 115.                                                    
               We hold that petitioner failed to prove that he had a                  
          reasonable prospect of recovering any part of the $55,000 from              
          Mr. Suiter after 1990.                                                      

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