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property. People v. Ashley, 267 P.2d 271, 279 (Cal. 1954);
People v. Fujita, 117 Cal. Rptr. 757, 764 (Ct. App. 1974); People
v. Conlon, 24 Cal. Rptr. 219, 222 (Dist. Ct. App. 1962).
A theft loss requires a criminal appropriation of another’s
property. Edwards v. Bomberg, supra at 110; Bellis v.
Commissioner, 61 T.C. 354, 357 (1973), affd. 540 F.2d 448 (9th
Cir. 1976); Harcinske v. Commissioner, T.C. Memo. 1984-132.
The record in this case is sparse as to the circumstances in
which petitioner wired Graves $60,000. The record does reveal
that petitioner was given a note; thus it appears that petitioner
initially believed that the transaction was designed as a loan.
We have no information as to what Grave’s intentions were with
respect to the funds. There is nothing in this record indicating
that any civil or criminal action was taken against Graves upon
his failure to either invest or return the funds. Whether a
theft occurred, it is unclear whether the theft occurred at the
time the funds were wired to Graves, or at some later time. More
importantly, if there was a theft, the record is unclear as to
when petitioner discovered the theft and whether she pursued a
claim for reimbursement.
As indicated, for purposes of section 165(a), a loss arising
from theft is treated as sustained during the taxable year in
which the taxpayer discovers such loss. Sec. 165(e); sec. 1.165-
8, Income Tax Regs.; see Lolli v. Commissioner, T.C. Memo. 1996-
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