Precision Pine & Timber, Inc. - Page 9




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          amortizable asset due to any of a variety of factors including              
          "legislative or regulatory action."  The regulation is                      
          controlling only when assets become obsolete over a period of               
          time greater than 1 year.  Id.  Assuming that petitioner's                  
          noncompetition agreements became obsolete as a result of a                  
          "sudden" event, the 1995 prohibitory injunction, the Court must             
          look elsewhere for guidance.                                                
               When an amortizable asset becomes obsolete within 1 taxable            
          year, a taxpayer may be entitled to a loss deduction.  Keller               
          Street Dev. Co. v. Commissioner, 323 F.2d 166, 171 (9th Cir.                
          1963), affg. in part, and revg. in part 37 T.C. 559 (1961); Moise           
          v. Burnet, 52 F.2d 1071 (9th Cir. 1931); Coors Porcelain Co. v.             
          Commissioner, supra at 692.  The appropriate statutory provision            
          for the allowance of a loss deduction for extraordinary                     
          obsolescence of a depreciable asset occurring within 1 year is              
          section 165(a).  See sec. 1.165-1, Income Tax Regs.  Generally,             
          section 1.167(a)-8, Income Tax Regs., provides the rules                    
          governing the recognition, amount, and basis for gain or loss               
          resulting from the sudden termination of the usefulness of                  
          depreciable assets.  Coors Porcelain Co. v. Commissioner, supra             
          at 692; secs. 1.165-2(c) and 1.167(a)-8(a), -9, Income Tax Regs.            
               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 as a deduction under section 165(a),            






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