- 12 -
of abandonment. United States v. S.S. White Dental Manufacturing
Co., 274 U.S. 398 (1927); A.J. Indus., Inc. v. United States, 503
F.2d 660, 670 (9th Cir. 1974); CRST Inc. v. Commissioner, 92 T.C.
1249, 1257 (1989), affd. 909 F.2d 1146 (8th Cir. 1990). When the
taxpayer has not relinquished possession of an asset, there must
be a concurrence of the act of abandonment and the intent to
abandon, both of which must be shown from the surrounding
circumstances. A.J. Indus., Inc. v. United States, supra.
Abandonment of an intangible property interest should be
accomplished by some express manifestation, Citron v.
Commissioner, 97 T.C. 200, 210 (1991), and “the Tax Court [is]
entitled to look beyond the taxpayer’s formal characterization.”
Laport v. Commissioner, 671 F.2d 1028, 1032 (7th Cir. 1982),
affg. T.C. Memo. 1980-355. That a partnership claimed an
abandonment loss in its tax return for the year in issue is not
sufficient to constitute an overt act. See Equity Planning Corp.
v. Commissioner, T.C. Memo. 1983-57.
Petitioner argues that the cancellation of escrow and
petitioner’s conversation with Janas were sufficient events to
demonstrate abandonment. Additional facts in the record,
however, are inconsistent with a finding that FRGC abandoned the
project in 1997. Although petitioner testified that, as of
November 17, 1997, he believed that the project was “dead”,
escrow on the 1996 purchase agreement was not canceled until
Page: 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