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an ordinary business expense deduction of $400,000 relating to
the transfer to Wildervank of $400,000 in cash, a capital loss of
$2,118,644 relating to the transfer to Wildervank of the 10
shares of Cove common stock, and an ordinary business expense
deduction of $21,840,660 relating to the transfer to Wildervank
of its interests in the Brussels Leaseback and in the Trust
Fund.7
Petitioner’s approximate $22 million claimed ordinary
business expense deductions offset the $11 million in income that
petitioner was required to report on the sale of assets to Loral
and also resulted in petitioner’s reporting for 1994 a claimed
net operating loss of $8,953,708. Petitioner elected to carry
back from 1994 to 1992 and to 1993 the $8,953,708 claimed net
operating loss to offset Quintron’s reported income for those
years, and based thereon respondent issued refunds to petitioner
for 1992 and 1993 in the respective amounts of $1,172,448 and
$684,705.
In respondent’s notice of deficiency to petitioner for 1992,
1993, and 1994, respondent disallowed petitioner’s claimed
$400,000 and $21,840,660 ordinary business expense deductions
relating to the above transactions petitioner claimed on its 1994
7 Petitioner’s tax return preparer, Howard B. Teig, C.P.A.,
received $39,940 for his involvement in the above transactions
and for his preparation of petitioner’s 1994 Federal income tax
return.
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