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income for years far beyond 1980 (namely, to 1989, 1990, and
1991) is not allowable.
Net operating losses and the carryback and carryforward
thereof are to be determined pursuant to the law applicable to
the year in which the losses occurred, without regard to the law
applicable to other years to which losses are carried back or
forward. Reo Motors, Inc. v. Commissioner, 338 U.S. 442, 446
(1950); sec. 1.172-1(e)(1) and (2), Income Tax Regs. Section
172, as applicable to 1975, provides a maximum net operating loss
carryback period of 3 years immediately preceding the year of the
loss and a maximum net operating loss carryforward period of 5
years immediately following the loss.
Generally, net operating losses are first carried back and
then carried forward until the losses are fully absorbed or until
the carryforward period expires. Sec. 172(b); sec. 1.172-1,
Income Tax Regs. Neither section 172 nor any other provision of
the Internal Revenue Code or the bankruptcy law in effect for
19752 provides for any tolling, during bankruptcy proceedings, of
the period for which NOL deductions may be carried forward.
Section 806(a) of the Tax Reform Act of 1976, Pub. L. 94-
455, 90 Stat. 1598, extended the carryforward period under
2 The Bankruptcy Act of 1898, as amended by the Chandler Act
of June 22, 1938, ch. 575, sec. 314, 52 Stat. 840, 907, provides
for a stay once a bankruptcy petition has been filed only of the
"commencement or continuation of any proceeding to enforce any
lien upon the property of a debtor" for cause shown or of any
other judicial proceeding.
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