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Discussion3
The parties do not dispute petitioners’ entitlement to an
investment interest expense deduction under section 163(a), but
the parties do dispute the calculation of that deduction. The
main issue of contention between the parties is whether the term
“investment income”, as defined by section 163(d)(4)(B), includes
petitioners’ loss carryover for purposes of calculating the
limitation on the investment interest expense deduction.
The parties have not cited any case deciding the narrow
legal question presented herein, and we are not aware of any such
case. In resolving this issue, we rely on section 163(d) and its
underlying framework and legislative history.
A. Statutory Framework
The starting point for the interpretation of a statute is
the language itself. Consumer Prod. Safety Comm. v. GTE
Sylvania, Inc., 447 U.S. 102, 108 (1980); see also United States
v. Bryant, 671 F.2d 450, 453 (11th Cir. 1982); Warbelow’s Air
Ventures, Inc. v. Commissioner, 118 T.C. 579, 583 (2002). We
interpret the statute with reference to the legislative history
primarily to learn the purpose of the statute and to resolve any
ambiguity in the words contained in the text. Allen v.
3We need not decide whether sec. 7491, concerning burden of
proof, applies to the present case because the facts are not in
dispute and the issue is one of law. See Higbee v. Commissioner,
116 T.C. 438 (2001).
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