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OPINION
Respondent argues that FRGC did not sustain a deductible
abandonment loss in 1997 and that all expenses claimed in 1997
and 1998 were capital in nature and are therefore not currently
deductible. Petitioner acknowledges that a large percentage of
the 1997 expenditures were nondeductible capital expenditures at
the time they were made. However, petitioner argues that the
expenses became deductible when the failure to obtain the
requisite zoning changes resulted in cancellation of the 1996
purchase agreement. At trial, petitioner limited his arguments
with respect to allowable deductions for 1997 to whether FRGC
sustained an abandonment loss.
Petitioner also argues that the burden of proof should be
shifted to respondent in accordance with the provisions of
section 7491. We need not decide whether the conditions of
section 7491 have been met by petitioner in this case, however,
as the resolution of these issues does not depend on which party
has the burden of proof. We resolve these issues on the basis of
a preponderance of the evidence in the record, giving more weight
to objective events than to subjective characterizations of
intent.
Abandonment Loss
FRGC incurred expenses totaling $669,126 in 1997 in
connection with its attempt to acquire suitable property for
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Last modified: May 25, 2011