- 3 -
income tax returns for the subject years. Jerry and his wife,
Freda, resided in Georgia and South Carolina, respectively, when
their petition was filed.
Bases in Ram, Innovative, and Twist-Tex
Jerry works in the carpet industry and owns or has owned
interests in various companies. These companies include:
(1) Ram, Innovative, and three other S corporations named
American Extrusions (American), Thomas Service Industries, Inc.
(TSI), and Mattel Carpet & Rug, Inc. (Mattel), (2) Twist-Tex and
one other limited liability company named U.S. Extrusions, and
(3) one C corporation named Inter-Con Trading Group, Inc. (Inter-
Con). Jerry’s ownership interests in these eight entities were
as follows:
1994 1995 1996 1997
American 35% 35% 35% 35%
Innovative -0- 25 25 25
Inter-Con Trading Group, Inc. 100 100 100 100
Mattel1 50 50 50 50
Ram -0- 25 25 25
TSI 100 100 100 100
Twist-Tex -0- 33.3 33.3 33.3
U.S. Extrusions -0- -0- 33.3 33.3
1 Mattel’s only other shareholder during these
years was Jerry’s brother Mike.
Petitioners contend that Jerry had sufficient bases in
certain of the passthrough entities to allow him to carry back
losses incurred in subsequent years. For 1995, Jerry’s
distributive share of Ram’s ordinary loss was $1,231,845, and his
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