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Nevertheless, on that return petitioners apparently claimed an
ordinary loss deduction of $708,689, attributable to petitioner’s
surrender of the distributed partnership interest. This ordinary
loss deduction apparently gave rise to a net operating loss that
resulted in the net operating loss carryover deductions here in
dispute.
In the notice of deficiency, respondent disallowed the net
operating loss carryover deduction claimed for each year in issue
because, according to respondent, petitioners failed to establish
that a loss was incurred in 1993 “on the abandonment of a
partnership interest”.
Discussion
An individual who abandons a partnership interest is
entitled to a deduction for any loss sustained during the year of
that abandonment if, in addition to other requirements, (1) the
individual intends to abandon the partnership interest, and (2)
the individual’s intent to abandon the interest is manifested by
some affirmative act of abandonment. Sec. 165(a), (c)(2); Citron
v. Commissioner, 97 T.C. 200, 208-209 (1991); Tsakopoulos v.
Commissioner, T.C. Memo. 2002-8. Both parties cite Citron in
support of their respective positions.6 According to
petitioners, petitioner intended to abandon the distributed
6 In this case, given the manner in which the issue was
framed, we need not address the computation or characterization
of the abandonment loss deducted in 1993.
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