Nasser and Shahpar Golshani - Page 9

                                        - 8 -                                         
          there exists a claim for reimbursement with respect to which                
          there is a reasonable prospect of recovery, no portion of the               
          loss is sustained under section 165 until it can be ascertained             
          with reasonable certainty whether such reimbursement will be                
          received.  Whether a reasonable prospect of recovery exists is a            
          question of fact.  See Halliburton Co. v. Commissioner, 93 T.C.             
          758, 770 (1989), affd. 946 F.2d 395 (5th Cir. 1991); Colish v.              
          Commissioner, 48 T.C. 711, 715 (1967); sec. 1.165-1(d)(2)(i),               
          Income Tax Regs.  The prospect of recovery must be based upon a             
          legal right to claim reimbursement from a third party in the year           
          the loss occurs.  Halliburton Co. v. Commissioner, supra at 772;            
          Colish v. Commissioner, supra at 717; sec. 1.165-1(d)(2)(i),                
          Income Tax Regs.  In this connection we note that we concluded in           
          Halliburton Co. v. Commissioner, supra at 780, as follows:                  
                    As of December 31, 1979, Iranian political power                  
               was in a state of disarray, and the United States had                  
               been unable even to commence negotiations with Iran to                 
               resolve the crisis even though a principal stumbling                   
               block had been removed, i.e., the Shah had left the                    
               United States for Panama.  Not until the fall of 1980,                 
               after a series of events occurred in 1980, including                   
               the Iranian clerical faction’s assumption of power, the                
               outbreak of the Iran-Iraq war, increased United States                 
               economic sanctions against Iran, the failed American                   
               rescue mission, the death of the Shah, and the                         
               impending change in the U.S. Administration, did Iran                  
               make overtures to settle the crisis.  If anything,                     
               these critical events are so clearly independent of the                
               factual circumstances that existed as of December 31,                  
               1979, as to reinforce the conclusion that the elements                 
               of a reasonable prospect of recovery were absent,                      
               rather than present, as of that date.  Equally clearly,                
               the fact that the Algiers Accords came into being in                   
               1981 is not, in and of itself, an indication that such                 





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  Next

Last modified: May 25, 2011