- 18 -
pleted transactions and as fixed by identifiable events occurring
in such taxable year. See sec. 1.165-1(d)(1), Income Tax Regs.
If a casualty occurs that may result in a loss and, in the year
of such casualty, there exists a claim for reimbursement with
respect to which there is a reasonable prospect of recovery, for
purposes of section 165 no portion of the loss with respect to
which reimbursement may be received is sustained until it can be
ascertained with reasonable certainty whether or not such reim-
bursement will be received. See sec. 1.165-1(d)(2)(i), 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 that must be determined upon an examination of all the facts
and circumstances. See id. Whether or not reimbursement of a
loss will be received may be ascertained with reasonable cer-
tainty by, for example, a settlement of the claim, an adjudica-
tion of the claim, or an abandonment of the claim. See id.
Mr. Mitic contends that respondent erred in disallowing
petitioners’ claimed casualty loss deduction for 1994. According
to Mr. Mitic, petitioners’ position in the 1994 joint return with
respect to the claimed casualty loss deduction was required by
Form 4684 and the instructions for that form.7 We disagree.
7As we understand it, Mr. Mitic alternatively argues that if
we were to find that petitioners are not entitled to the claimed
casualty loss deduction for 1994, they would be entitled to a
casualty loss deduction for 1995 that is calculated by subtract-
(continued...)
Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NextLast modified: May 25, 2011