- 5 -
petitioners maintain that section 465(b)(3)(B)(ii) applies to the
instant case.
The relevant portions of section 465 provide as follows:
SEC. 465. DEDUCTIONS LIMITED TO AMOUNT AT RISK.
(a) Limitation to Amount at Risk.--
(1) In general.--In the case of-–
(A) an individual, and
(B) a C corporation with respect to which the
stock ownership requirement of paragraph (2) of
section 542(a) is met,
engaged in an activity to which this section applies,
any loss from such activity for the taxable year shall
be allowed only to the extent of the aggregate amount
with respect to which the taxpayer is at risk (within
the meaning of subsection (b)) for such activity at the
close of the taxable year.
* * * * * * *
(b) Amounts Considered at Risk.--
(1) In general.--For purposes of this section, a
taxpayer shall be considered at risk for an activity
with respect to amounts including-–
(A) the amount of money and the adjusted
basis of other property contributed by the
taxpayer to the activity, and
(B) amounts borrowed with respect to such
activity (as determined under paragraph (2)).
(2) Borrowed amounts.--For purposes of this
section, a taxpayer shall be considered at risk with
respect to amounts borrowed for use in an activity to
the extent that he-–
(A) is personally liable for the repayment of
such amounts, or
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011