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Petitioner alternatively claims a deductible loss in 1990
based upon her ultimate failure to recover these expenditures.
She explains that when the property did not sell, it was
foreclosed upon. Section 165(a) allows a deduction for "any loss
sustained during the taxable year and not compensated for by
insurance or otherwise." To be claimed as a deduction, a loss
must be evidenced by a closed or completed transaction. United
States v. S.S. White Dental Manufacturing Co., 274 U.S. 398, 401
(1927); Ramsay Scarlett & Co. v. Commissioner, 61 T.C. 795, 807
(1974), affd. 521 F.2d 786 (4th Cir. 1975); sec. 1.165-1(b),
Income Tax Regs. If the taxpayer has a claim for reimbursement
of a loss and there is a reasonable prospect of recovery, the
loss is not deductible until it can be ascertained with
reasonable certainty whether or not the reimbursement will be
received. Ramsay Scarlett & Co. v. Commissioner, supra; Julicher
v. Commissioner, T.C. Memo. 2002-55; sec. 1.165-1(d)(2)(i) and
(3), Income Tax Regs. The evidence before us, although far from
clear, indicates petitioner was being repaid some amounts of
these expenditures in 1990, the year for which she claims the
loss, and, further, that the foreclosure did not take place until
1991, 1 year later than the year for which she claims the loss.
The return of $1,500 of her expenditures in 1990 suggests that
she had a reasonable prospect of recovery for the claimed loss in
the year for which the deduction is claimed; petitioner has not
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