ACCT

3333
Fall
2017

Research Submission #2
PROBLEM # 2
BHADVIYA, SHILPA
 Shilpa bhadviya page 1

1. Section 165 Losses (a)

2. Regulation 165 Losses (e )
3. Section 183
4. Reg 1.165-8 (a) (2)
5. BOOTHE v. COMM., Cite as 56 AFTR 2d 85-5676, Code Sec(s) 165,
(CA9), 08/16/1985
6. Monteleone v. Commissioner, 34 T.C, 688, 692(1960)
7. Reg. Section 1.165-(1)(d)(1).
8. RAINBOW INN, INC. v. COMM., Cite as 26 AFTR 2d 70-5704, (CA3),
10/26/1970
9. Treas. Reg. Section 165-1(d)(2)
10. KRAHMER v. U.S., 59 AFTR 2d 87-482 (810 F.2d 1145), Code
Sec(s) l65, (CA Fed Cir), 02/04/1987

Facts:
Sateen bought an original Kandinsky for her art collection from a mail order
advertisement for $310,000. The painting , however, was actually a forgery
by K.O Peakat and according to a world renowing and Texas state art
experts , is not worth more than $310. What if anything can sateen deduct
for federal income tax purposes in the year of the discovery of the forgery?

Issue:
Can Sateena deduct for federal Income Tax purposes in the year of the
discovery of the forgery as a Theft Loss under I.R.C. 165?