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generally may not claim deductions for expenses incurred by a
corporation. See Gantner v. Commissioner, 91 T.C. 713, 725
(1988), affd. 905 F.2d 241 (8th Cir. 1990).
The final item for which substantiation is at issue is
petitioner’s entitlement to a carryforward of a net operating
loss from 1994 to the years in issue. Petitioner argues in the
petition that there was a “1994 loss [which] was greater than
anticipated which was not carried forward into 1995.” Petitioner
did not claim any deduction for such a loss on his return, and
consequently the issue is not addressed in the notice of
deficiency.
As a general rule, net operating loss carryovers are allowed
as deductions under section 172(a). However, unless the taxpayer
elects otherwise, a net operating loss for any taxable year
generally must be carried back to each of the 2 taxable years
preceding the year of loss before being carried forward to each
of the next 20 years following the year of loss. See sec.
172(b)(1)(A), (b)(2), and (b)(3).
Petitioner briefly testified concerning this issue, but
provided no details and presented no corroborating documentation
concerning the amount of any losses in 1994. Amended returns
filed by petitioner with the Internal Revenue Service for taxable
years 1992 through 1997, presumably showing these and other
losses, are in the record. The assertions in these documents,
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