Michael H. Gulley and Paula M. Gulley - Page 3




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               3.  Whether, as petitioners contend, under section 706(d),                
          GSD’s loss for 1991 is allocated pro rata to petitioner from                   
          January 1 to July 11, 1991, and to his bankruptcy estate and                   
          Martha Johnston from July 12 to December 31, 1991.  We hold that               
          none of GSD’s loss for 1991 is allocated to petitioner.                        
               4.  Whether, as petitioners contend, the bankruptcy trustee               
          abandoned the administration of the bankruptcy estate’s GSD                    
          interest so that, under 11 U.S.C. section 554 (1988), the GSD                  
          interest reverted back to petitioner as if it had not entered the              
          bankruptcy estate.  We hold that the bankruptcy trustee did not                
          abandon the GSD interest.                                                      
               5.   Whether any of the 1991 NOL survived after the NOL was               
          reduced, pursuant to section 108, by the amount of cancellation                
          of indebtedness income excluded from gross income.  We hold that               
          none did.                                                                      
               Unless otherwise provided, section references are to the                  
          Internal Revenue Code in effect during the years in issue.  Rule               
          references are to the Tax Court Rules of Practice and Procedure.               
                                    FINDINGS OF FACT                                     
               Some of the facts have been stipulated and are so found.                  
          A.   Petitioners                                                               
               Petitioners were married in 1993 and lived in San Antonio,                
          Texas, when they filed their petition in this case.  Petitioner                
          was married to Martha R. Johnston (Johnston) (formerly known as                






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