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expense deductions that were claimed on its 1988, 1989, and 1990
Federal partnership income tax returns.
OPINION
Under the authority of Commissioner v. Tufts, 461 U.S. 300
(1983), the parties do not dispute that, in the year in which L&C
Springs' ownership interest in the L&C Properties was terminated
and L&C Springs was thereby relieved of its debt obligation to
Tanglewood, the amount of L&C Springs' $2,250,000 nonrecourse
debt obligation relating to the L&C Properties is to be treated,
under sections 1001, 1221(2), 1231, 1245, and 1250, as part of
the amount of income realized by L&C Springs (to be reduced by
L&C Springs' adjusted tax basis in its leasehold interest in the
L&C Properties). See Estate of Delman v. Commissioner, 73 T.C.
15, 32-33 (1979).
Also as indicated, the parties agree that for periods of
time after L&C Springs' ownership interest in the L&C Properties
was terminated all interest and depreciation deductions claimed
by L&C Springs should be disallowed.
A formal sale or exchange of property constitutes an
identifiable event that will trigger realization of gain or loss
relating to a taxpayers' ownership interest in property. Secs.
165(f), 1001. Other events, however, may also constitute an
identifiable event that will trigger realization of gain or loss
relating to ownership of property. An involuntary foreclosure
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