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in 1996. As a result of respondent's concession, the Court need
not address whether the agreed loss was incurred by petitioners
in a trade or business or in a transaction not connected with a
trade or business but entered into for profit, nor does the Court
need to decide whether petitioners' loss was an abandonment loss.
See secs. 1.165-2(a), 1.167(a)-8, Income Tax Regs. Petitioners
contend they sustained a theft loss and that the loss was
sustained during 1996.
The basic question, therefore, is factual: whether
petitioners sustained their loss during 1996. The documentation
offered into evidence at trial dealt almost exclusively with the
year 1994, consisting of various communications between
petitioner, his attorney, and BMI. There was no documentary
information offered into evidence between petitioner and BMI
during 1995, although petitioner claimed he continued making
demands on BMI that year. During 1996, however, the record does
not reflect any communications between petitioner or his attorney
with BMI. Petitioners have not pointed to any factual event that
occurred during 1996 that would relate to the loss in question.
Section 1.165-1(d)(2)(i), Income Tax Regs., provides, in
pertinent part: "When a taxpayer claims that the taxable year in
which a loss is sustained is fixed by his abandonment of the
claim for reimbursement, he must be able to produce objective
evidence of his having abandoned the claim, such as the execution
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