- 6 -
Total 109,340
The 1983, 1984, 1985, and 1986 NOL carryforwards, discussed
above, were incurred in various businesses operated by Elwood.
In 1984, Elwood entered into a transaction which affects
his reported 1984 loss, and therefore the NOL's reported by
petitioner and Elwood for the years at issue.
Specifically, in 1984, Elwood sold a one-fourth interest in
a 149.67-acre tract of land located in Grapevine, Texas
(Grapevine property). Elwood had inherited this property from
his mother, Martha Cluck, who died July 29, 1983. Elwood's three
brothers owned the remaining three-fourths interest in the
Grapevine property, which they too had inherited from their
mother in 1983.
Elwood prepared the Federal estate tax return for the Estate
of Martha Cluck (Estate), and he signed it as the Estate's
personal representative. The return included a one-half interest
in the Grapevine property in the decedent's gross estate, valued
at $527,250. An appraisal, attached to the return, valued a 100-
percent interest in the Grapevine property at $1,054,500.5
On March 29, 1984, Elwood and his brothers entered into a
contract for the sale of the Grapevine property to Joe L. Wright.
5 According to Elwood's testimony, the reason only one-half the
value of the Grapevine property was included in the decedent's
gross estate was that Elwood and his brothers believed that they
had inherited a one-half interest in the property in 1964, which
is the year their father died.
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