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interest had never entered the bankruptcy.
We disagree that the bankruptcy trustee abandoned the GSD
interest. The trustee settled the Sunbelt litigation for
$20,000, which was paid to the bankruptcy estate. Thus, he acted
to preserve the value of petitioner’s partnership interest.
Respondent stated on brief that the bankruptcy trustee
abandoned the GSD interest when the bankruptcy estate closed.
Petitioners misconstrue this as respondent’s concession that the
trustee abandoned petitioner’s GSD interest. On the contrary,
respondent was merely pointing out that the GSD interest was
deemed to have been abandoned to petitioner under 11 U.S.C.
section 554(c) (West 1988) when the bankruptcy case was closed in
August 1993. Respondent does not concede that the bankruptcy
trustee abandoned the GSD interest during the pendency of
petitioner’s bankruptcy; rather, respondent contends the
opposite, that is, that the bankruptcy trustee acted to preserve
the value of petitioner’s interest in GSD.
E. Whether Section 108 Eliminates the 1991 NOL
Respondent argues that no part of the 1991 NOL remained
after applying section 108. Petitioners contend that, because
petitioner did not elect to terminate his 1991 tax year under
section 1398(d)(2), the 1991 NOL was a tax attribute of
petitioner’s, rather than of his bankruptcy estate. Thus,
petitioners contend the 1991 NOL was not extinguished by section
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