interesting tax case



what is the tax treatment for the fellowing case:

Kay meets Dan through a business associate. Dan tells kay that he is
directing a business venture that purchases poorly managed restaurants in
order to turn them around and make them profitable. Dan mentions that he
needs money to acquiring a real good property(above). Kay loans Dan $30,000
for the venture in condition of 14% interest per annum over 5 year-period.
later, kay discovers that Dan had never intended to purchase the restaurant
and infact had used the money for his own benefit. kay sues Dan that Dan
falsely, fraudulently, and deceitfully represented the money would be
invested and repaid. however, kay is never able to recover any amount of the
loan. how can Kay fill the loss in her 2002 tax returns??


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