Lakewood Associates, Robert G. Moore, Tax Matters Partner - Page 4

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          Virginia Beach, Virginia.  Sec. 7482(b)(1)(E).  Robert G. Moore             
          (petitioner) is Lakewood's tax matters partner.                             
          Lakewood was formed in the State of Virginia on August 12,                  
          1987.  During 1987, Lakewood acquired approximately  649 acres of           
          unimproved real estate located in Chesapeake, Virginia.  Although           
          Lakewood acquired the property with a view towards profiting from           
          its development, efforts in this regard were halted when the                
          Federal Government issued its Wetlands Manual of 1989 (Wetlands             
          Manual).3  Under the Wetlands Manual, property falling within the           
          definition of protected wetlands is subject to the jurisdiction             
          of the Environmental Protection Agency and the United States Army           
          Corps of Engineers (COE).4                                                  
          As a consequence of the release of the Wetlands Manual,                     
          Lakewood engaged various environmental engineering consultants to           
          prepare wetland evaluations and provide advice regarding the                
          feasibility of developing the property.  After determining that             
          approximately 75 percent of Lakewood's property constitutes                 
          protected wetlands as defined in the Wetlands Manual, the                   
          consultants advised Lakewood that, in accordance with the                   
          Wetlands Manual, a permit would have to be obtained from COE                

          3  While not critical to the disposition of the pending                     
          motion, it appears that the 1989 Wetlands Manual was abandoned              
          sometime in 1991 in favor of the readoption of the Wetlands                 
          Manual of 1987.                                                             
          4  Prior to 1989, the property in question was not                          
          considered wetlands.                                                        




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