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applicable provision here and, thus, we must apply it as written.
CSI Hydrostatic Testers, Inc. v. Commissioner, supra; Wyman-
Gordon Co. v. Commissioner, 89 T.C. 207 (1987).
Accordingly, there is nothing in the foregoing statutory
language that requires or even implies that the COD income passes
through to the S corporation shareholders. Hence, we do not
conclude from a literal application of the relevant statutory
provisions that a shareholder in an insolvent S corporation may
increase his or her basis in stock with respect to the excluded
COD income.
It is appropriate, however, to examine the legislative
history for further evidence of the legislative purposes. United
States v. American Trucking Associations, 310 U.S. at 543-544.
We look to the statute as written by the legislators, and we
consult the statute's legislative history to learn its intended
purpose and to resolve ambiguity in the words used therein.
Landgraf v. USI Film Prods., 511 U.S. 244 (1994); Garcia v.
United States, 469 U.S. 70, 76 n.3 (1984); Consumer Prod. Safety
Commn. v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980). Finally,
exemptions from taxation cannot rest on "mere implications".
United States v. Stewart, 311 U.S. 60, 71 (1940).
With these general principles in mind, we examine the
legislative history and purpose of section 108. Initially, the
insolvency exception was a judicially created doctrine. See,
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