M E M O R A N D U M To: Student From: Paula Partner Date: May 30, 2022 Subject: Semyon Ovechkin’s Potential Loss I have

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M E M O R A N D U M
To: Student
From: Paula Partner
Date: May 30, 2022
Subject: Semyon Ovechkin’s
Potential Loss
I have recently acquired a new client named Semyon Ovechkin.
Semyon is a native of Russia and has come to the United States to
play hockey. While in Russia, Semyon was an avid gambler and
wanted to continue his habit here in the States. To that end,
during the off-season, Semyon had an illegal gambling business
operated from his home.
Recently the police caught word of his gambling operation.
Following their tips, the police obtained and executed a search
warrant on Semyon’s home and surrounding premises. The police
seized gambling paraphernalia and $200,000 in cash in conducting
the warrant. Realizing the jig was up, Semyon consented to
forfeit the money that had been seized to the state.
With respect to the $200,000 cash seized by the authorities, Semyon
came to see me. His question was whether the money he
voluntarily conceded to the state could be claimed as a loss under
Section 165. I would like you to research this issue and do
two things. First, draft a brief letter to Semyon indicating
the results of your research and whether or not the loss is
allowable. Second, respond to me with a reply memo indicating
how you interpreted the law you found in Semyon’s situation.
I have already undertaken the research in this project and have
found a case that will provide you with all you need to find your
answer. The case is listed below. The code provision
provided will be the exclusive source for your letter and memo.
Semyon’s address is 1234 S City Blvd., Salt Lake City, UT
84646.
Please use our business address corresponding with Semyon: Partner
& Associates, 1323 Harrison Blvd., Ogden, UT 84403.
Sources
IRC § 165
Edman Hackworth (TC Memo. 2004-173).