Assignment:
1. Charles is a CPA who gave bad tax advice to one of his clients. Client was required to pay additional 75K tax liability because of his advice. Malpractice insurance covers but doesn't want to file a claim because might lose insurer and pay very high insurance premiums, also damage to reputation. Charles volunteered to pay the 75K for his client - is this deductible as a loss under IRC 165(c)(1)?