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ducted in their respective returns for 1991, 1992, and 1993 only
a portion of the total amounts of investment interest claimed in
their respective Forms 4952 for those years. Pursuant to section
163(d)(2), they treated the balance of the total amount of
investment interest claimed in Forms 4952 for each of the years
1991 and 1992 as disallowed investment interest to be carried
over to the succeeding taxable year.
In Schedules A, Itemized Deductions (Schedule A), of their
returns for 1991, 1992, and 1993, petitioners claimed total
interest deductions of $179,235, $141,388, and $96,901, respec-
tively. Those deductions consisted of the following claimed
amounts of interest for the taxable years indicated:
Claimed
Taxable Home Mortgage Claimed
Year Interest and Points Investment Interest
1991 $22,527 $156,708
1992 19,280 122,108
1993 15,744 81,157
In Schedule D, Capital Gains and Losses (Schedule D), of
their 1992 return, petitioners claimed a net long-term capital
loss of $194,118. Included in the computation of that loss was a
claimed long-term capital loss of $289,316 (claimed 1992 worth-
less stock loss) that petitioners explained in a statement
attached to their 1992 return as follows: "The National Bank of
Harrah Common Stock was evaluated in June, 1992 and determined to
be worthless in accordance with Internal Revenue Code Section
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