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almost 6 weeks later, on December 29, 1997. In addition, FRGC
continued to pay fees to Susie Mehen for marketing and to FR
Management for overhead for December 1997 and January 1998.
Petitioner did not make a formal notification to FRGC’s investors
that the project or partnership would be abandoned in 1997. In
fact, petitioner did not meet with the investors until early
January 1998, when he required their approval to enter into a new
purchase agreement with Cherry.
Petitioner relies upon our decision in Chevy Chase Land Co.
v. Commissioner, supra, in which we allowed an abandonment loss
for the costs of negotiating a prospective long-term lease on an
unimproved tract of land and for the costs of an unsuccessful
attempt to rezone the land. The rezoning was inextricably tied
to the lease transaction and was limited to the construction of a
specified type of department store for the lessee. Id. at 488.
When the rezoning effort failed, the lessee exercised its rights
and terminated the entire transaction. The taxpayer in Chevy
Chase Land Co. regarded the future commercial development of the
area as foreclosed, and, because the rezoning efforts had been so
specific, none of the items (except a topographical map) acquired
in the course of rezoning were thought to have any continuing
value once the lease was terminated. The facts of Chevy Chase
Land Co. are distinguishable from the instant case, however,
because FRGC was successful in obtaining a new purchase agreement
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