Lakewood Associates, Robert G. Moore, Tax Matters Partner - Page 2

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                  land for residential development because of the Federal                             
                  wetland regulations.                                                                
                        Held:  There has not been a realization event that                            
                  fixes the decrease in property value in a closed and                                
                  completed transaction, and L is not entitled to a loss                              
                  deduction under sec. 165(a), I.R.C.                                                 

                  Douglas E. Kahle, for petitioner.                                                   
                  John C. McDougal, for respondent.                                                   

                  GERBER, Judge:  Respondent issued a notice of final                                 
            partnership administrative adjustments to Lakewood Associates for                         
            taxable year 1989.  The issue for our consideration is whether                            
            Lakewood Associates is entitled to a loss deduction under section                         
            1651 in 1989 for a decrease in the value of real property alleged                         
            to have been caused by restrictions imposed on its ability to                             
            develop the property by Federal wetland regulations that were                             
            issued in that year.2                                                                     
                                         FINDINGS OF FACT3                                            
                  Lakewood Associates (Lakewood) is a Virginia general                                
            partnership with its principal place of business in Virginia                              

                  1All section references are to the Internal Revenue Code in                         
            effect for the year in issue, and all Rule references are to the                          
            Tax Court Rules of Practice and Procedure, unless otherwise                               
                  2In an earlier opinion, respondent’s motion for summary                             
            judgment was denied.  See Lakewood Associates v. Commissioner,                            
            T.C. Memo. 1995-552.                                                                      
                  3The parties’ stipulation of facts and the attached exhibits                        
            are incorporated by this reference.                                                       

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