Richard Gorkes, Jr. and Susan Gorkes - Page 18

                                       - 17 -                                         
                    1999       2000       2001                                        
          Investment interest expense                          $63,807     $92,036     $2,779
          Disallowed investment interest expense from                                 
          prior taxable year                                   —--       58,668    146,217
          Total investment interest expense                     63,807     150,704    148,996
          Gross income from property held for investment         5,139       4,487        453
          Net gain from the disposition of property held                              
          for investment                                        ---         ---        ---
          Net investment income                                  5,139       4,487        453
          Disallowed investment interest expense to be                                
          carried forward to the next taxable year           58,668     146,217    148,543
          Investment interest expense deduction                  5,139       4,487        453

               D.  Conclusion                                                         
               We hold that “net gain”, as that term is used in section               
          163(d)(4)(B)(ii)(I), requires inclusion of petitioners’ capital             
          losses and capital loss carryovers for purposes of calculating              
          the section 163(d)(1) limitation on the investment interest                 
          expense deduction.  We hold further that petitioners’ investment            
          interest expense deductions for 1999, 2000, and 2001 are limited            
          to $5,139, $4,487, and $453, respectively.  In view of the                  
          foregoing, we sustain respondent’s determination on the disputed            
          issue.                                                                      
               We have considered all of the other arguments made by                  
          petitioners and, to the extent that we have not specifically                
          addressed them, we find them to be without merit.                           













Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  Next

Last modified: May 25, 2011