- 14 -
B. Whether Petitioner May Carry Forward to 1994 Net Operating
Losses From 1991 and 1993
Petitioner contends that he may carry forward to 1994 net
operating losses from 1991 and 1993. We disagree.
Generally, for the years in issue, a taxpayer must carry a
net operating loss back 3 years and carry it forward 15 years.
See sec. 172(b)(1)(A).3 A taxpayer may elect to forgo the
carryback period. See sec. 172(b)(3). Petitioner did not elect
to forgo the carryback period for 1991 or 1993.
When a taxpayer does not elect to forgo the carryback
period, the taxpayer may carry losses forward only to the extent
they exceed the taxable income for the carryback years even if
the taxpayer did not carry back operating losses for those years.
See sec. 172(b)(2). To carry forward or carry back net operating
losses, the taxpayer must prove the amount of the net operating
loss carryforward or carryback and that his or her gross income
in other years did not offset that loss. See sec. 172(c); Jones
v. Commissioner, 25 T.C. 1100, 1104 (1956), revd. and remanded on
other grounds 259 F.2d 300 (5th Cir. 1958); Vaughan v.
Commissioner, 15 B.T.A. 596, 600 (1929).
Petitioner offered into evidence his tax returns for 1990,
1991, 1992, and 1993. A tax return does not establish that a
taxpayer had income and losses in the amounts reported on the
3 In 1997, sec. 172(b)(1)(A) was amended to generally
require a 2-year carryback and 20-year carryforward.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011