Paine v. Commissioner, 63 T.C. 736, 740 (1975), aff'd without published opinion, 523 F.2d 1053 (5th Cir. 1975); see also Pascucci v. Commissioner, T.C. Memo. 2024-43, at *13- 14.

Tex. Penal Code Ann. sec. 31.01 (4)(A) (Vernon 1974); Swope v. State, 723 S.W. 216, 223 (Tex.App. 1986). In Paine v. Commissioner, 63 T.C. 736 (1975), affd. without published opinion 523 F.2d 1053 (5th Cir. 1975), the taxpayer relied on the predecessor to Texas Penal Code section 31.03 to claim a theft loss deduction. The taxpayer had purchased stock on the open market.

The act resulting in the alleged theft loss must have been a criminal act under the law of the state in which the alleged theft occurred. Paine v. Commissioner, 63 T.C. 736, 740 (1975), aff'd, 523 F.2d 1053 (5th Cir. 1975)

See Boothe v. Commissioner, 768 F.2d 1140 (9th Cir. 1985), rev'g 82 T.C. 804 (1984). The Raifmans do not allege privity with Mr. Cathcart, Mr. Keys, or any other agent or principal of Derivium or SLF. Instead, the Raifmans argue that our analysis ought to look beyond privity and to apply a "feeder" theory to our theft loss analysis, as suggested in Paine v. Commissioner, 63 T.C. 736 (1975), aff'd without published opinion, 523 F.2d 1053 (5th Cir. 1975), and Jensen v. Commissioner, T.C. Memo. 1993-393, aff'd without published opinion, 72 F.3d 135 (9th Cir. 1995). As we reach our holding on the question of intent, however, we need not and do not address the Raifmans' "feeder" theory or otherwise analyze any issue pertaining to matters of privity.

Bellis v. Commissioner, 540 F.2d 448, 449 (9th Cir. 1976), aff'g 61 T.C. 354 (1973). While a theft loss doesn't require proof of a conviction,Paine v. Commissioner, 63 T.C. 736, 740 (1975), aff'd without published opinion, 523 F.2d 1053 (5th Cir. 1975), the burden is on Leslie to prove by a preponderance of the evidence that a theft occurred under California law, see Halata v. Commissioner, T.C. Memo. 2012-351. The Commissioner noted during trial that Leslie made no headway with police enforcement on this matter, nor did she sue or file an administrative claim against Stanley.

Without any evidence of Nemirofsky's statements or his own state of mind, there is no real proof of a theft loss. Riley must show that a theft occurred as defined by California law. See Paine v. Commissioner, 63 T.C. 736, 740 (1975), aff'd, 523 F.2d 1053 (5th Cir. 1975). In California, theft by false pretenses requires a false representation and intent to defraud.

Whether a theft loss has been established depends upon the law of the State where the alleged theft occurred. Bellis v. Commissioner, 540 F.2d 448, 449 (9th Cir. 1976), aff'g 61 T.C. 354 (1973); Luman v. Commissioner, 79 T.C. 846, 860 (1982); Paine v. Commissioner, 63 T.C. 736, 740 (1975), aff'd without published opinion, 523 F.2d 1053 (5th Cir. 1975). A taxpayer must prove a theft occurred under applicable State law by only a preponderance of the evidence.

Moreover, if a loss occurred, he has not shown that there was not a reasonable prospect of recovery as late as the settlement of the lawsuit in 2010. See generally Marine v. Commissioner, 92 T.C. 958, 975-980 (1989), aff'd without published opinion, 921 F.2d 280 (9th Cir. 1991); Paine v. Commissioner, 63 T.C. 736, 743 (1975), aff'd without published opinion, 523 F.2d 1053 (5th Cir. 1975). Petitioner is not entitled to deduct $120,000 as a theft loss for 2006.

Whether a theft loss has been established depends upon the law of the State where the alleged theft occurred. Bellis v. Commissioner, 540 F.2d 448, 449 (9th Cir. 1976), affg. 61 T.C. 354 (1973);Luman v. Commissioner, 79 T.C. 846, 860 (1982); Paine v. Commissioner, 63 T.C. 736, 740 (1975), affd. without published opinion 523 F.2d 1053 (5th Cir. 1975). A criminal conviction is not necessary in order for a taxpayer to demonstrate a theft loss.

Generally, whether a theft loss has been sustained depends upon the law of the State where the loss was sustained. Bellis v. Commissioner, 540 F.2d 448, 449 (9th Cir. 1976), affg. 61 T.C. 354 (1973);Luman v. Commissioner, 79 T.C. 846, 860 (1982); Paine v. Commissioner, 63 T.C. 736, 740 (1975), affd. without published opinion 523 F.2d 1053 (5th Cir. 1975). Although a criminal conviction in a State court may conclusively establish the existence of a theft, the deduction does not depend upon whether the perpetrator is convicted or prosecuted or even whether the taxpayer chooses to move against the perpetrator.