Allan & Judy N. Green - Page 11

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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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