James R. and Susan B. Brickman - Page 6

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                                       OPINION                                        
               Respondent contends that petitioners must reduce Susan's NOL           
          to zero because they excluded COD income pursuant to section                
          108.6  Petitioners first argue that James' release from his                 

               5(...continued)                                                        
               NOL generated in 1991    878,025   439,012   439,013                   
               NOL before sec.                                                        
               108 Reduction            3,113,444 1,556,719 1,556,725                 
               Sec. 108 NOL Reduction                                                 
               in 1990                  (751,610)  (751,610)     -0-                  
               Sec. 108 NOL Reduction                                                 
               in 1991                  (708,059)  (708,059)       -0-                
               NOL carryover to 1992    1,653,775 97,050 1,566,725                    
               NOL utilized in 1992(1,166,045)   (97,050) (1,068,995)                 
               Carryforward to 1993     487,730   -0-   487,730                       
               6  Sec. 108, in pertinent part, provides:                              
               (a) Exclusion From Gross Income.--                                     
                    (1) In General.--Gross income does not include any                
               amount which (but for this subsection) would be includible             
               in gross income by reason of the discharge (in whole or in             
               part) of indebtedness of the taxpayer if--                             
                         *  *  *  *  *  *  *                                          
                         (B) the discharge occurs when the taxpayer is                
                    insolvent,                                                        
          *  *  *  *  *  *  *                                                         
               (b) Reduction of Tax Attributes.--                                     
                    (1) In General.--The amount excluded from gross income            
               under subparagraph (A), (B), or (C) of subsection (a)(1)               
               shall be applied to reduce the tax attributes of the                   
               taxpayer as provided in paragraph (2).                                 
                    (2) Tax Attributes Affected; Order of Reduction.--                
               Except as provided in paragraph (5), the reduction referred            
                                                             (continued...)           




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