- Ag Docket
(taxpayer sought refund for “theft” loss after losing investment money from company that went bankrupt after selling tandem investments and unsecured promissory notes in violation of state law governing “securities”; IRS denied plaintiffs refund claim and plaintiffs brought suit; summary judgment motion brought on issue of whether theft loss occurred; court disclaimed legal notion that “theft” under in section 165(c)(3) is dependent on state law and that it means “the fraudulent taking of property belonging to another from his possession, or from the possession of some person holding the same for him, without his consent, with the intent to deprive the owner of the value of the same, and to appropriate it to the use or benefit of the person taking”; in determining the issue, four questions must be answered: whether the conduct in question constitutes a theft, whether the theft loss was discovered the year the deduction is claims, whether in the year discovered, there was still a reasonable prospect of recovering funds lost, and the amount of loss; court determined factual questions existed regarding the four questions, so summary judgment denied).
CALT does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. CALT's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.