- 52 -
limited to the severance of realty into two or more parcels, but
applies with respect to parts of the bundle of rights comprising
property, including easements). That argument, however, was not
made by petitioner, and we need not address it any further.
C. The Atrium Assets: Loss Deduction Under Section 165(a)
In a footnote in petitioner's brief, petitioner, relying on
Echols v. Commissioner, 950 F.2d 209 (5th Cir. 1991), argues that
it is entitled to a loss deduction under section 165(a) for 1987
equal to the cost of the Atrium Assets because, although the
Atrium was not abandoned in 1987, it was worthless. Petitioner
asserts:
The Atrium was completed during 1987; and an
independent appraisal has concluded that the Atrium had
a negative value (i.e., was worthless) as of
December 31, 1987. The proper year of deduction under
I.R.C. � 165(a) is 1987, as that is the year in which
the Atrium was completed (i.e., became a closed
transaction).
In response, respondent argues that petitioner's interpretation
of Echols v. Commissioner, supra, is inconsistent with authority
of this Court, and, in any event, the Atrium's worthlessness has
not been established.
Section 165(a) allows a deduction for any loss sustained
during the taxable year and not compensated for by insurance or
otherwise. To be allowable, a loss must be evidenced by closed
and completed transactions, fixed by identifiable events, and
actually sustained during the taxable year. Sec. 1.165-1(b),
(d)(1), Income Tax Regs. In Echols v. Commissioner, supra at
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