- 10 - Manual. Lakewood's tax matters partner Robert G. Moore who owned the Boy Scout Tract adjacent to the Elbow Lake property also claimed a section 165 loss deduction in 1989 with regard to the Boy Scout Tract due to the issuance of 1989 Manual. OPINION The issue for our consideration is whether Lakewood is entitled to a loss deduction in 1989 because of the issuance of the 1989 Wetlands Manual and MOA. Petitioner argues that Lakewood is entitled to a deduction in the amount of the decrease in value of the Elbow Lake property as a result of being prevented from developing the property for residential use under the Federal wetland regulations. Petitioner contends that Lakewood's inability to use its property for the purpose Lakewood intended when it purchased the property constitutes an involuntary conversion of property. Accordingly, petitioner contends that Lakewood is entitled to a loss deduction under section 165. On its 1989 tax return, Lakewood characterized the loss as a governmental taking of property upon the issuance of the 1989 Manual and the execution of the MOA. On brief, however, petitioner contends that a constitutional taking of the property is not required in this case to establish a deductible loss under section 165. Section 165(a) permits a deduction for any loss sustained during the taxable year and not compensated for by insurance orPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011