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fully absorbed in those 3 carryback years, or if the
taxpayer elects under section 172(b)(3) to waive the
carryback of the NOL, section 172(b)(1)(A)(ii) mandates
that the unabsorbed NOL be carried forward to, and
applied in, the first taxable year postdating the loss.
Section 172(b)(1)(A)(ii) further mandates that this
carryover procedure follow for each of the next 14
years until the NOL is applied in full. With the
exception of section 172(b)(3), and certain other
specialized rules set forth in section 172(b), none of
which are applicable here, the statute does not provide
explicitly any rule that would allow a taxpayer to
decline to apply an NOL in the year which is next in
line under the statutory scheme.
The record does not establish any of these requirements.
Accordingly, we sustain respondent’s determination as to this
issue in full.9 In so doing, we note again that 1981 and 1982
are outside of the applicable 15-year period and that petitioners
have chosen to structure the record so as not to allow us to
attribute any specific portion of the NOL carryovers to years
other than 1981 and 1982. We also note that any NOL that
petitioner incurred in 1983 could not be carried over to 1999.
9 We also are unpersuaded that petitioners had basis in the
S corporations to support a deduction of any losses passed
through to them from those corporations. Whereas Ms. Green
testified at trial that petitioners’ basis in the S corporations
totals $1,150,000, we find that testimony incredible and
unsupported by the record. We decline to rely upon it. We note,
however, that even if petitioners had basis in those S
corporations, the record does not establish the amount of any
loss that the S corporations may have incurred, let alone the
amount of any loss that passed through to petitioners.
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