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or recapture of tax credits or deductions, an overt act of
abandonment is unnecessary if, under the facts and circumstances,
“it is clear for all practical purposes that the taxpayer will
not retain the property”. L&C Springs Associates v.
Commissioner, supra at 870; see Cozzi v. Commissioner, 88 T.C.
435, 445-446 (1987); Brountas v. Commissioner, 74 T.C. 1062, 1074
(1980).
Consistent with his September 1986 letter ruling, respondent
has stipulated that the partnership did not dispose of the
project before May 22, 1986 (the date of the letter ruling
request). Notwithstanding this stipulation, however, respondent
suggests that even before May 22, 1986, the partnership was in
the process of “gradually” abandoning the project. In support of
his position, respondent points to many of the same circumstances
that were considered in the September 1986 letter ruling.
Respondent notes, among other things, that on August 1, 1985, the
partners and partnership gave DOE written notice that they were
terminating their participation in the project; that various
partners, with varying degrees of interest and of active
participation of other partners, attempted unsuccessfully for
many months to negotiate with DOE to restructure the debt; and
that, in respondent’s view, certain of the partners had
effectively abandoned the project. As the September 1986 letter
ruling concluded, however, and as respondent now concedes, these
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