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108 because the reduction of tax attributes under section
108(b)(1) is determined by the bankruptcy estate, not the
individual debtor. See sec. 108(d)(8). We disagree that the
1991 NOL was a tax attribute of petitioner.
Petitioner’s interest in GSD passed to the bankruptcy estate
of petitioner on July 11, 1991, when he filed the bankruptcy
petition. The 1991 NOL was thus a tax attribute belonging to,
and usable by, the bankruptcy estate, and it remained in the
estate until petitioner was discharged from bankruptcy and the
estate was terminated. See sec. 1398(i). The fact that
petitioner did not elect a short taxable year under section
1398(d)(2) does not entitle him to the NOL as his tax attribute.
See Kahle v. Commissioner, T.C. Memo. 1997-91 (taxpayer could not
use NOL carryforward in the taxable year in which he filed a
petition in bankruptcy because he did not elect a short taxable
year under section 1398(d)(2); NOL carryforward from prior year
passed to bankruptcy estate upon the filing of the petition).
Petitioner succeeded only to the unused portion, if any, of the
1991 NOL when his bankruptcy case closed in August 1993. See
sec. 1398(i). Any amount excluded from gross income under
section 108(a) is applied to reduce the tax attributes, such as
NOL’s, of the taxpayer. See sec. 108(b)(1). Thus, section
108(b) requires that the 1991 NOL be reduced by the amount of
discharge of indebtedness income excluded from income under
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