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awarded the redemption rights, especially in the light of DOE’s
long track record of mixed signals and reversals over the history
of the Great Plains project. But even if we were to assume, for
sake of argument, that respondent’s speculations are sound, the
fact remains that the partnership would have benefited materially
from the cashflows generated by the project during the redemption
period.
In support of his position that the litigation over the
disputed redemption rights should not postpone the finality of
the foreclosure sale, respondent relies on L&C Springs Associates
v. Commissioner, T.C. Memo. 1997-469, affd. 188 F.3d 866 (7th
Cir. 1999). Respondent’s reliance on that case is misplaced.
L&C Springs Associates held that a realization event with respect
to mortgaged real estate occurred in the year before the
foreclosure sale, when the taxpayer effectively abandoned the
mortgaged property.27 L&C Springs Associates, unlike the instant
case, did not involve the effect of ongoing foreclosure
litigation on the finality of the foreclosure sale.
Respondent does not appear to dispute that the foreclosure
litigation presented genuine legal issues as to whether the
partnership retained redemption rights under North Dakota law.28
27 As discussed infra, we conclude that the partnership did
not abandon the project prior to the conclusion of the
foreclosure litigation.
28 Similarly, respondent does not expressly advance any
(continued...)
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