- 10 -
($593,492) as a long-term capital loss, allowed a $3,000 capital
loss deduction in 1991, and treated $590,492 as a long-term
capital loss carryover from 1991 to 1992. Consistent with this
treatment of the transaction in 1991, respondent determined that
petitioners had a net operating loss of $61,698 for that year.
After carrying the net operating loss back to 1988 and forward to
1989 and 1990, respondent determined that the loss had been
extinguished prior to 1992. As a result of the foregoing,
respondent disallowed the net operating loss carryover deduction
of $587,581 claimed by petitioners in 1992, which disallowance
results in the issue here in dispute. Other adjustments made in
the notice of deficiency are computational in nature and will be
resolved automatically with the resolution of the disputed issue.
Discussion
Although not specifically addressed by either party, there
appears to be agreement between them on the following points.
First, the BCBI stock in the hands of petitioner constituted a
capital asset as defined by section 1221. Except as provided by
section 1244, because of the period that petitioner held the
3(...continued)
purposes. In this regard it should also be noted that the
parties stipulated that in the agreement petitioner "agreed to
sell all of the issued and outstanding shares of stock of * * *
[BCBI] for $1,050,000" which does not accurately describe the
transaction, but is consistent with the positions taken on
petitioners' original and amended 1991 returns and in the notice
of deficiency.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011