Melvin J. Laney and Carolyn A. Laney - Page 29

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                                    II. Carryover Deductions                                          
                  The years in issue in the instant case are 1986, 1987, and                          
            1988.  The deficiencies that respondent determined in the instant                         
            case result from the disallowance of deductions carried over from                         
            1983.  In order to redetermine these deficiencies we must                                 
            consider whether an item arose in 1983, whether the item is of                            
            the sort that might give rise to a carryover to the years in                              
            issue, and if so, then what is the nature and amount of the item.                         
            Sec. 6214(b);10 Hill v. Commissioner, 95 T.C. 437, 439-444                                
            (1990), and cases cited therein.  In general, the nature and                              
            amount of the carryover item is determined and redetermined under                         
            the law in effect for the year in which the carryover item arose                          
            (1983), rather than the year(s) to which the carryover item is                            
            carried.  Sec. 172(e).                                                                    




                  10    Sec. 6214 provides, in pertinent part, as follows:                            
                  SEC. 6214.  DETERMINATIONS BY TAX COURT.                                            
                                *    *    *    *    *    *    *                                       
                        (b) Jurisdiction Over Other Years and Quarters.--The                          
                  Tax Court in redetermining a deficiency of income tax for                           
                  any taxable year or of gift tax for any calendar year or                            
                  calendar quarter shall consider such facts with relation to                         
                  the taxes for other years or calendar quarters as may be                            
                  necessary correctly to redetermine the amount of such                               
                  deficiency, but in so doing shall have no jurisdiction to                           
                  determine whether or not the tax for any other year or                              
                  calendar quarter has been overpaid or underpaid.                                    





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