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For each year in issue, Dr. Beck claimed net operating loss
(NOL) carryovers as follows:
Year NOL Carryover
1991 $367,251
1992 318,145
1993 377,950
1994 408,759
1995 424,310
Notices of Deficiency
In the notice of deficiency issued to Dr. Beck, respondent
determined that Dr. Beck had claimed and failed to substantiate
certain Schedule C deductions as follows:
Claimed Respondent’s
Deductible Determination of Adjustment to
Year Expenses Deductible Expenses Taxable Income
1991 $382,205 $88,407 $293,798
1992 591,436 270,839 320,597
1993 1542,044 288,668 253,376
1994 1600,159 247,194 352,965
1995 377,218 110,174 267,044
1 As previously indicated, for years 1993 and
1994, petitioner’s claimed Schedule C deductions were
$529,114 and $585,831, respectively. In the notice of
deficiency, respondent appears to have overstated the
amounts of deductions claimed by Dr. Beck for 1993 and
1994, resulting in excessive adjustments to taxable
income for these 2 years. We expect these errors to be
corrected in the Rule 155 computation.
Based on these adjustments, respondent redetermined Dr.
Beck’s Schedule C income for each year in issue and allocated
one-half of that income, along with one-half of Schedule E
royalty income reported by Dr. Beck for each year in issue, to
Mrs. Beck as her community property income. Accordingly, in
separate notices of deficiency, respondent determined that Mrs.
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