- 26 -
perfecting of title in the rights to the water in the reservoir
on their property.
The Knauss suit also involved property rights. The record
demonstrates that petitioners defended against the claim of an
easement on the Pescadero property. Petitioners contend that
such an easement would have prevented the livestock from freely
traversing the property for pasturage purposes and would have
prevented petitioners from installing and maintaining the
irrigation system. Consequently, petitioners contend that the
outcome of the Knauss lawsuit would have affected the income
arising from petitioners' farming activity. The origin of the
claim in the Knauss lawsuit, however, also involved a defense of
property rights. Knauss was denied a right-of-way or easement
across the Pescadero property, and the expenses incurred in
connection with the Knauss lawsuit are capital in nature and
nondeductible.
To reflect the foregoing and due to concessions of the
parties,
Decision will be entered
under Rule 155.
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Last modified: May 25, 2011