Robert R. Plante and Mary B. Plante - Page 10

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          ($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.           
               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                

          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.                                                              

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