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deductions set forth in the statute, the regulations, and the
legislative history. Sec. 1312(2); S. Rept. 1567, supra, 1939-1
C.B. (Part 2) at 814-817; sec. 1.1312-2(b), Example (1), Income
Tax Regs. If it was not allowed, there would be no error and no
inconsistent position, the carryforward would not have resulted
in a double deduction, and the mitigation provisions would not
apply to lift the bar of section 6501.
Petitioner contends that the CLD's were not "allowed" for
purposes of the statute, but were suspended and properly carried
forward under the "at risk" rules of section 465. In the 1991
notice, respondent disallowed the deductions. Petitioner did not
contest this disallowance, and agreed to the 1992 stipulation,
which disallowed the CLD's for 19862 and 1988, but was silent as
to 1987. Petitioner contends that, with the 1992 stipulation, he
was agreeing in both principle and practice that all CLDs were
subject to the "at risk" rules of section 465, including the one
claimed in 1987. Petitioner notes that neither he nor respondent
has ever changed position as to the allowability of the CLD's.
Petitioner does, however, recognize that the tax he paid for
1987, which was computed after taking the CLD for that year was
never altered by the 1992 stipulation. Petitioner argues:
2 A deduction in the amount of $135,000, the amount
petitioner had "at risk" in the transaction for purposes of sec.
465, was allowed; all other amounts were disallowed and
suspended.
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