Richard Gorkes, Jr. and Susan Gorkes - Page 17

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          double tax benefit.  Under petitioners’ approach, capital gains             
          would be offset by capital losses and capital loss carryovers and           
          not subjected to taxation.  Then, those same capital gains that             
          escaped taxation would be used to increase investment income and,           
          simultaneously, the investment interest expense deduction.  This            
          double tax benefit is clearly not permitted by section 163(d).              
               We now turn to petitioner’s investment interest expense                
          deductions for the taxable years at issue.  Based on the amounts            
          reported by petitioners on their Schedules D, petitioners had a             
          total net capital loss in each taxable year at issue.  It                   
          follows, then, that petitioners had zero “net gain” in 1999,                
          2000, and 2001 for purposes of section 163(d)(4)(B)(ii)(I).                 
          Therefore, petitioners have net investment income and allowable             
          investment interest expense deductions for the taxable years at             
          issue as follows:                                                           





















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