St. Charles Investment Co., Burton C. Boothby, Tax Matters Person - Page 10

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          interpretation in that the prohibition reflected in this                    
          provision appears in similar terms and follows a list of specific           
          examples of passthrough items.  S. Rept. 97-640 (1982), 1982-2              
          C.B. 718, 725; H. Rept. 97-826 (1982), 1982-2 C.B. 730, 737.                
          Although section 469(b) does not use the term "carryforward", we            
          think the phrase "shall be treated as a deduction * * * allocable           
          to such activity in the next taxable year" has the same meaning.            
          We think this is particularly true in the case of a closely held            
          C corporation where passive losses are available as deductions              
          against active losses.  Our view in this respect is reinforced by           
          that fact that the Senate Finance Committee report, accompanying            
          the enactment of section 469, states that "Suspended passive                
          activity losses for the year are carried forward indefinitely,              
          but are not carried back" (emphasis added).  S. Rept. 99-313                
          (1986), 1986-3 C.B. (Vol. 3) 1, 722; see also H. Conf. Rept. 99-            
          841 (Vol. II) (1986), 1986-3 C.B. (Vol. 4) 1, 137, describing the           
          Senate version of section 469 (there was no House of                        
          Representatives version) as providing that "Disallowed losses and           
          credits are carried forward" (emphasis added).  Moreover, while             
          we recognize that the use of captions is limited, see section               
          7806(a), we think it not amiss, in the context of this case, to             
          note that section 469(b) is entitled "Disallowed Loss or Credit             
          Carried to Next Year" (emphasis added).                                     
               Petitioner points to Congress' placement of section 469                
          within subchapter E, part II of the Code, entitled "Methods of              

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