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Gross receipts: Dr. Jacobs
Services rendered $40,750
Reimbursement 75,120
Total gross receipts 115,870
Less: cost of goods sold -75,120
Gross profit/gross income 40,750
Less: reported gross profit/gross income -44,163
Overreported gross profit/gross income (3,413)
In view of the foregoing, we sustain respondent’s income
determination for 1995 in that we hold that petitioner received
unreported gross income for that year in the amount of $29,606.
However, we do not sustain respondent’s income determination
for 1996; rather, we hold that petitioner overreported gross
income for that year in the amount of $3,413.
B. Net Operating Loss Deductions
Section 172 allows a deduction for a net operating loss
(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). As
claimant of an NOL deduction, petitioner must prove her right
thereto. See United States v. Olympic Radio & Television,
Inc., 349 U.S. 232, 235 (1955).
On her 1995 return, petitioner claimed a deduction for a
“prior year NOL”, relating to an alleged NOL for 1994. On her
1996 return, petitioner again claimed a deduction for a “prior
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