What is the closed transaction doctrine, and why does it exist for purposes of recognizing a loss realized on holding property?

A. The closed transaction doctrine states that a realized loss for the sale or exchange of commercial real estate property must be completed within 30 days of the close of the tax year. This doctrine exists to give taxpayers a window of time to complete pending real estate transactions.

B. The closed transaction doctrine states that a realized loss must be evidenced by a completed transaction or identifiable event. This doctrine exists to prevent taxpayers from recognizing a loss as a result of fluctuating prices prior to the disposition of the property.

C. The closed transaction doctrine states that a realized loss must be evidenced by a notarized statement that the transaction is to be completed within 12 months of the close of the tax year. This doctrine exists to give taxpayers a window of time to complete pending transactions.

D. The closed transaction doctrine recognizes that a property could decline in value and be worthless in the future. This doctrine exists to allow taxpayers to recognize a loss as a result of fluctuating prices prior to the disposition of the property.