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Respondent contends that, even if petitioner were able to
satisfy the requirements of section 172, petitioner would be
barred from claiming the net operating loss carryover due to the
provisions of section 1398. Petitioner contends the bankruptcy
estate was terminated in October 1995 when the bankruptcy court
ordered the final distribution of funds on hand in petitioner's
bankruptcy estate. At that time, the trustee had previously
filed a final report with the bankruptcy court. Hence,
petitioner claims he is entitled to utilize the net operating
losses remaining in the bankruptcy estate for his 1993 taxable
year.8 For the reasons discussed below, we find that the
bankruptcy estate has not terminated, and we hold that petitioner
was not yet entitled to utilize any net operating losses
remaining in the bankruptcy estate as provided under section
1398(i).
As stated above, the termination of the estate is the
equivalent of the closing of the estate. In order for a
bankruptcy estate to be closed, upon the full administration of
the estate and the discharge of the trustee, the bankruptcy court
issues a final decree closing the case. 11 U.S.C. 350(a) (1994).
Although the trustee filed his final report on August 7, 1995,
and no objections to that report had been filed, a final decree
8 The reasoning behind petitioner's contention that he is
entitled to utilize the losses as a carry forward to his 1993 tax
year is that he filed his 1993 tax return in Aug. 1996. If the
bankruptcy case terminated in Oct. 1995, the losses would be
available after that date for his use.
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