- 44 -
of the taxpayer's taxable income. Petitioner does not dispute
the 10-percent limitation if we sustain the revocation of its
tax-exempt status. Respondent also disallowed the grants for
patient care on the basis that the patients were not eligible
donees as specified in section 170(c). We agree with respondent
that the grants for patient care are not eligible charitable
contributions. Petitioner's reference to Rev. Rul. 56-304, 1956-
2 C.B. 306, which provides the basis for allowing section
501(c)(3) organizations to distribute funds to individuals, is
misplaced. That ruling assumes that the taxpayer is tax exempt,
which is not the case during the taxable years involved herein.
Thus, we sustain respondent's determination of the amounts
allowed for charitable deductions.13
Net Operating Loss Carryover From 1983
At the outset, we note the facts that the taxable year 1983
is not before us or that it may be a barred year do not preclude
us from considering that year for carryforward to the taxable
years at issue herein. See Hill v. Commissioner, 95 T.C. 437,
440 (1990).
13 For 1985, petitioner reported grants to organizations as
$145,073 and to individuals as $550, whereas the parties agree
that petitioner gave $700 to organizations and $138,521.97 for
patient care. Since respondent has not requested an increase in
the deficiency, we sustain the amounts respondent originally
allowed.
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