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Petitioners raised the possibility that section 165(g)
applies to the Riviera transaction. Section 165(g) provides that
if any security which is a capital asset becomes worthless during
the taxable year, the resulting loss shall be treated as a loss
from the sale or exchange of a capital asset. To be able to
deduct such losses, the petitioners must show: That the losses
were incurred; when the losses were incurred; that petitioners
are entitled to deduct such losses; whether the losses were
capital or noncapital, or business or personal; and, the amount
of capital gain during the intervening years, in order to compute
any allowable carryforward. Aazami v. Commissioner, T.C. Memo.
1993-436. Petitioners have not met these criteria. Thus, we
hold they are not entitled to claim a loss under section 165(g).
We further consider petitioners' reliance on section 6214 to
make the argument that they are entitled to currently claim
losses that may have occurred in prior years. In pertinent part,
section 6214(b) provides as follows:
The Tax Court in redetermining a deficiency of income
tax for any taxable year * * * shall consider such
facts with relation to the taxes for other years * * *
as may be necessary correctly to redetermine the amount
of such deficiency * * *
A taxpayer's failure to claim capital losses in prior years
does not necessarily result in the disallowance of deductions in
subsequent years. Lang v. Commissioner, T.C. Memo. 1983-318.
However, the amount of any carryover loss is reduced in
accordance with section 1212(b), regardless of whether a
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