- 2 -
Respondent determined a deficiency in petitioners’ Federal
income tax for 1997 in the amount of $6,062.
The only issue for decision is whether investment income, as
defined by section 163(d)(4)(B), includes a long-term capital
loss carryover (loss carryover) for purposes of calculating the
section 163(d)(1) limitation on the investment interest expense
deduction. We hold that it does.
Background
This case was submitted fully stipulated under Rule 122. We
incorporate by reference the parties’ stipulation of facts and
accompanying exhibits.
Petitioners resided in Sarasota, Florida, at the time their
petition was filed with the Court.
A. Petitioners’ Form 1040 for 1997
Petitioners timely filed a joint Form 1040, U.S. Individual
Income Tax Return, for 1997. Petitioners attached to their Form
1040 the following Schedules and Forms that are pertinent to this
case: Schedule A, Itemized Deductions; Schedule B, Interest and
Dividend Income; Schedule D, Capital Gains and Losses; Form 4797,
Sales of Business Property; and Form 4952, Investment Interest
Expense Deduction.
On Schedule A, petitioners claimed, inter alia, a $26,721
investment interest expense deduction. Petitioners calculated
this amount on Form 4952, as shown below:
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011