James Triplett - Page 8




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          and receipts that petitioner could explain relate to expenses               
          paid or incurred in connection with his rental real estate                  
          activities, which expenses appear to have been deducted on the              
          Schedule E.  Furthermore, certain invoices, bills, statements,              
          and receipts seem to involve personal, nondeductible expenses.              
          See sec. 262(a).                                                            
               We see no connection between the Schedule C deductions here            
          in dispute and the records offered by petitioner to substantiate            
          those deductions.  Furthermore, we find nothing in those records            
          that supports petitioner’s suggestion at trial that he is                   
          entitled to deductions not claimed on his return.  Respondent’s             
          disallowance of all of the deductions claimed on the Schedule C             
          is sustained.                                                               
          2.   “Carry Forward Loss” Credit/Net Operating Loss                         
               Petitioner claimed a $138,555.16 credit for a “carry forward           
          loss”.  At trial, petitioner attempted to explain how he computed           
          this amount, but we are unable to follow his explanation.7  Our             

               7  On brief petitioner acknowledged, properly so, that his             
          prior reliance on sec. 39 as support for the credit was                     
          misplaced.                                                                  
               Sec. 172 allows a deduction for a net operating loss (NOL),            
          which may be carried back to years preceding the year of the loss           
          and carried over to years following the year of the loss.  Sec.             
          172(b).  The item here in dispute is described as a “carry                  
          forward loss credit”.  If petitioner intended, albeit inartfully,           
          to deduct an NOL carryover, the deduction would have to be denied           
          because he failed to establish that: (1) He sustained an NOL                
          prior to 1993; and (2) any portion of the NOL was available to              
          carry over into 1993.  The copies of petitioner’s Federal income            
                                                             (continued...)           





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