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final partnership administrative adjustment (FPAA) to Lakewood
stating in pertinent part:
Since it has not been established that a
condemnation, involuntary conversion or a disposition
based on a closed completed transaction occurred within
the meaning of the Internal Revenue Code, no loss is
allowable. In addition, it has not been established
that the designation of your property as wetlands or
the issuance of the wetlands manual and regulations
deprived you of all economic use of the property. If,
however, the issuance of the wetlands manual and
regulations is ultimately determined to constitute a
condemnation, an involuntary conversion, or other
allowable loss; any such loss must be reduced by the
partnership's right to reimbursement for such loss.
Since you have not established that such reimbursement
would not equal or exceed the partnership's basis in
the property, no loss is allowable.
In response to the FPAA, petitioner invoked this Court's
jurisdiction by filing a timely petition for readjustment of
partnership items.
As indicated, the matter is presently pending before the
Court on respondent's Motion for Summary Judgment. For purposes
of the present motion only, respondent: (1) Admits all of the
allegations of fact contained in the petition; and (2) concedes
that the issuance of the Wetlands Manual so restricted Lakewood's
ability to develop its property as to amount to a "taking" of the
property within the meaning of sections 1231 and 165. Assuming
there was such a taking, respondent maintains that she is
entitled to judgment as a matter of law on the theory that
Lakewood "had a co-extensive right to reimbursement from the
Federal Government which would reduce to zero the amount of the
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Last modified: May 25, 2011