Lakewood Associates, Robert G. Moore, Tax Matters Partner - Page 19

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            provided a delineation of wetlands to the Corps as required for                           
            the permit, and the Corps confirmed the delineation.  These                               
            actions show that Lakewood has not abandoned the property.  The                           
            property has continued to be held by Lakewood for future use or                           
            sale.  We hold that there was not a loss realization event with                           
            respect to the zoning laws.                                                               
                  To characterize the loss as ordinary under section 1231,                            
            petitioner at very least, would have to show that land use                                
            regulations constitute an involuntary conversion.  Section                                
            1.1231-1(e), Income Tax Regs., defines involuntary conversion of                          
            property as follows:                                                                      
                        the conversion of property into money or                                      
                        other property as a result of complete or                                     
                        partial destruction, theft or seizure, or an                                  
                        exercise of the power of requisition or                                       
                        condemnation, or the threat or imminence                                      
                        thereof.  Losses upon the complete or partial                                 
                        destruction, theft, seizure, requisition, or                                  
                        condemnation of property are treated as                                       
                        losses upon an involuntary conversion whether                                 
                        or not there is a conversion of the property                                  
                        into other property or money * * *                                            
            Government land use regulations, such as local zoning law or                              
            Federal wetland regulations, rarely constitute a condemnation of                          
            property under eminent domain powers.  See Lucas v. South                                 
            Carolina Coastal Council, 505 U.S. 1003 (1992); United States v.                          
            Riverside Bayview Homes, Inc., 474 U.S. 121 (1985); Agins v. City                         
            of Tiburon, 447 U.S. 255 (1980).  Condemnation requires property                          
            to be taken against the taxpayer's will by a public or quasi-                             

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