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Sons, Inc. v. Commissioner, 65 T.C. 422 (1975) (Tannenwald, J.,
concurring at 432 (mitigation provisions did not apply because
the same items not involved)), affd. 584 F.2d 53 (5th Cir. 1978).
Petitioner argues that any deficiency with respect to his 1987
taxable year was not due to the CLD, which petitioner concedes he
was not entitled to, but due to the inclusion of the $360,000 of
income, which respondent initially excluded from the 1987 taxable
year, and was forced to re-include as a result of our decision in
Hagestad v. Commissioner, supra. By this argument, petitioner
appears to be maintaining that it was the omitted income that was
the item giving rise to the error.
Petitioner's analysis fails to recognize that, while the
omission of income provided the foundation for the resulting
error, it was the CLD that became the error which gave rise to
the application of mitigation provisions. In this respect,
Bolten v. Commissioner, 95 T.C. 397 (1990), provides helpful
guidance. In that case, the disallowance of certain deductions
resulted in increased amounts of taxable income and became the
foundation for a reallocation of net operating loss deductions.
In holding that the mitigation provisions applied, we concluded
that the same item was involved, namely the net operating loss.
As we see it, the only difference between the situation in that
case and that involved herein is that, in Bolten, unrelated
deductions were involved whereas in the instant case we are
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