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Springs' interest in the L&C Properties should be treated as
having been terminated in 1988 or 1989.
The only issue for decision is whether L&C Springs’
ownership interest in the L&C Properties was abandoned or
terminated triggering for Federal income tax purposes a sale or
exchange of L&C Springs' interest therein in 1988, 1989, or 1990.
If we conclude that L&C Springs’ ownership interest in the L&C
Properties was abandoned or terminated in one of those years,
then L&C Springs would be required, under sections 1001, 1231,
1245, and 1250, to recognize ordinary income and capital gain in
the year of such abandonment or termination based on the amount
of accelerated depreciation claimed on the L&C Properties and on
the amount realized on such sale or exchange. Also, the above
interest and depreciation deductions that were claimed for 1988,
1989, and 1990 with respect to L&C Springs' ownership interest in
the L&C Properties would not be allowable for any period of time
after such abandonment or termination occurred.
FINDINGS OF FACT
On May 5 and June 30, 1980, Tanglewood Properties, Inc.
(Tanglewood), purchased from the Clinton Family Trust for a total
stated consideration of $2.1 million, subject to three existing
mortgages securing the land and buildings, an ownership interest
in a Florida land trust that owned the L&C Properties and the
related land. The L&C Properties were located in Miami and in
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