- 3 -
On March 3, 1991, respondent issued a statutory notice of
deficiency for the taxable years 1986 and 1988 (the 1991 notice
of deficiency), based on the disallowance of the CLD's for 1986,
1987, and 1988 and the exclusion of a separate item of $360,000
of income from the 1987 taxable year and its inclusion in 1986.
Because the $360,000 exclusion exceeded the disallowed $321,002
CLD, the 1991 notice of deficiency did not result in a deficiency
for 1987, but rather in an overassessment, no part of which,
however, was ever paid by respondent. Petitioner filed a
protective refund claim with respect to this overassessment, as
to which no further action was taken by petitioner, and which was
rejected by respondent as part of the 1995 notice of deficiency.
The issue of the CLD's was resolved by settlement. The
parties agreed on September 18, 1992, by a Stipulation of Agreed
Adjustments (the 1992 stipulation) that, in 1986, only $135,000
of the $200,250 CLD would be allowed, and the remaining $65,250
would be disallowed and suspended in accordance with the "at
risk" rules under section 465. The $51,972 CLD for 1988 was
disallowed in full, and the loss was also suspended in accordance
with the "at risk" rules. Since the taxable year 1987 was not
before the Court, the stipulation was silent as to the treatment
of the 1987 CLD of $321,002. The issue of the correct year of
inclusion of the $360,000 of income was resolved in Hagestad v.
Commissioner, T.C. Memo. 1993-300, issued on July 13, 1993,
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011