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Carryover of NOL’s, Investment Interest, and Investment Credit
Under Rule 142(a), petitioners have the burden of proof with
regard to each of the adjustments still at issue in this case
involving claimed carryovers (namely, a claimed $1,064,164 net
operating loss carryover from 1984, a claimed $479,000 investment
interest carryover from 1984, and a claimed $38,839 investment
credit carryover from 1984).1
Petitioners, however, have presented no credible evidence
and have not established the existence of, nor their entitlement
to, any of the claimed carryovers. Petitioners and their counsel
appear to seriously misunderstand the placement of the burden of
proof on these issues. For example, with regard to the
investment interest carryover, the following statement appears in
petitioners' opening posttrial brief --
respondent did not recompute or establish the proper
investment interest amount, and [respondent is] therefore
estopped from asserting that it may not be carried forward.
To the contrary, with regard to each of the claimed carryovers,
petitioners have the burden of proof, and they have failed to
satisfy it. Hill v. Commissioner, 95 T.C. 437, 439-444 (1990);
Lone Manor Farms, Inc. v. Commissioner, 61 T.C. 436, 440-442
1 On brief, petitioners concede a claimed charitable
contribution carryover from 1984.
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Last modified: May 25, 2011