When is an investment loss deductible? Adkins v. United States provides taxpayer-friendly guidance Erik M. Jensen
By: Jensen, Erik M
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Material type: 
ArticlePublisher: 2020Subject(s): INVERSIONES | PRODUCTOS FINANCIEROS | PERDIDAS | IMPUESTOS | DEDUCCIONES | ESTADOS UNIDOS | JURISPRUDENCIAOnline resources: Click here to access online
In:
Journal of Taxation of Investments v. 38, n. 1, Fall 2020, p. 83-92Summary: In May 2020, the United States Court of Appeals for the Federal Circuit decided an important case, Adkins v. United States, dealing with the timing of a deduction for investment losses, and it did so in a taxpayer-friendly way. In general, a taxpayer may not deduct a loss if a “reasonable prospect of recovery” exists. The Federal Circuit rejected conclusions of the Court of Federal Claims that a loss is not currently deductible if it is “unknowable” whether such a reasonable prospect exists and that, to be eligible for a deduction, a taxpayer must first pursue all possible means of recovery, regardless of the costs involved in doing so and regardless of the likelihood of success. A prospect of recovery isn’t necessarily a reasonable prospect of recovery.
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Disponible también en formato electrónico.
Resumen.
In May 2020, the United States Court of Appeals for the Federal Circuit decided an important case, Adkins v. United States, dealing with the timing of a deduction for investment losses, and it did so in a taxpayer-friendly way. In general, a taxpayer may not deduct a loss if a “reasonable prospect of recovery” exists. The Federal Circuit rejected conclusions of the Court of Federal Claims that a loss is not currently deductible if it is “unknowable” whether such a reasonable prospect exists and that, to be eligible for a deduction, a taxpayer must first pursue all possible means of recovery, regardless of the costs involved in doing so and regardless of the likelihood of success. A prospect of recovery isn’t necessarily a reasonable prospect of recovery.
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