FRGC Investment, LLC, James P. Mehen, Tax Matters Partner - Page 13




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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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