Robert R. Plante and Mary B. Plante - Page 11

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          stock any loss that resulted from its sale or disposition would             
          be treated as a long-term capital loss.  Secs. 1222 and 1223.               
          Secondly, the parties agree that petitioner suffered a loss on              
          the sale of his BCBI stock (the resolution of the issue here                
          under consideration could have an effect on the amount of the               
          loss; otherwise there is no dispute between the parties on the              
          point).  Lastly, the parties apparently agree that petitioner's             
          BCBI stock constituted small business stock within the meaning of           
          section 1244(c), subject to the provisions of section 1244(a) and           
          (b), which under the circumstances of this case would allow                 
          petitioners to treat $100,000 of the loss sustained on the sale             
          of the stock as an ordinary loss.  In this regard we note that              
          petitioners' treatment of the transaction on their 1991 amended             
          return (treating the entire loss as ordinary) is patently                   
          incorrect and inconsistent with section 1244, which as indicated            
          allows for only a limited amount of the loss to be treated as               
          ordinary.  Sec. 1244(b)(2).  From the allegations in the petition           
          and the arguments in petitioners' brief, we assume that                     
          petitioners have recognized their error on this point, and now              
          support their claim for a 1992 net operating loss carryover                 
          deduction upon the theory that they were entitled to a previously           
          unclaimed bad debt deduction in 1991.                                       
               In general, section 166 allows a taxpayer a deduction for              
          any debt that becomes worthless within the taxable year.  Sec.              

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