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See INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992).
With respect to petitioner’s contention that respondent
erred in disallowing the NOL deduction, section 172 allows a
deduction for an NOL for the taxable year in an amount equal to
the NOL carried back to the taxable year and the NOL carried
forward to the taxable year. See sec. 172(a). An NOL is defined
as the excess of deductions over gross income for a particular
taxable year, with certain modifications. See sec. 172(c) and
(d). Petitioner, as the claimant of an NOL deduction, must prove
his right thereto. See United States v. Olympic Radio & Televi-
sion, Inc., 349 U.S. 232, 235 (1955).
It is petitioner’s position that he had an NOL for 1993 that
he is entitled to carry forward to the year at issue. According
to petitioner, the NOL that he claims for 1993 was produced by an
alleged loss from the 1991 purported theft, which he did not
discover until sometime during 1993 (1993 claimed theft loss).
Respondent argues that petitioner has failed to substantiate the
1993 claimed theft loss and, consequently, has failed to prove
his entitlement to the NOL deduction.
Section 165 allows a taxpayer to deduct any loss from theft
in the year during which the taxpayer discovers such loss. See
sec. 165(a), (e). Petitioner bears the burden of proving that a
theft has occurred and that the requirements of section 165 have
been met. See Rule 142(a); Allen v. Commissioner, 16 T.C. 163,
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Last modified: May 25, 2011