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taxpayer claims that the taxable year in which a loss
is sustained is fixed by his abandonment of the claim
for reimbursement, he must be able to produce objective
evidence of his having abandoned the claim, such as the
execution of a release. [Emphasis added.]
In sum, section 1.165-1(d)(2)(i), Income Tax Regs., provides that
a loss is not sustained, i.e., recognized, for purposes of
section 165(a), if there exists a claim for reimbursement with
respect to the loss for which there is a reasonable prospect of
recovery, until it can be ascertained with reasonable certainty
whether or not such reimbursement will be received.
Respondent's Motion for Summary Judgment is premised on the
theory that Lakewood was guaranteed full compensation for the
loss resulting from the classification of its property as
wetlands. In particular, assuming the classification of
Lakewood's property as wetlands constitutes a "taking" of the
property, respondent contends that Lakewood is guaranteed to be
compensated by the Federal Government pursuant to the Fifth
Amendment to the U.S. Constitution which provides that "private
property [shall not] be taken for public use, without just
compensation."
Petitioner presents four alternative arguments in opposition
to respondent's motion. First, petitioner contends that, to the
extent respondent's motion is based on an admission of all
allegations of fact contained in the petition, respondent is
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