Jimmy A. Prince - Page 10

                                       - 10 -                                         
               Petitioner has failed to carry his burden of proof as to               
          this issue.  The record does not disprove respondent’s                      
          determination as to the self-employment expenses, as adjusted by            
          respondent’s concessions at trial.  We sustain that                         
          determination, as adjusted.  Lobe v. Commissioner, T.C. Memo.               
          2001-204 (and cases cited therein).                                         
          4.  NOL Deduction                                                           
               Section 172 allows a taxpayer to deduct an NOL for a taxable           
          year.  The amount of the NOL deduction equals the sum of the NOL            
          carryovers plus NOL carrybacks to that year.  Sec. 172(a).                  
          Absent an election to the contrary, an NOL for any taxable year             
          must first be carried back 3 years and then carried over 15                 
          years.  Sec. 172(b)(1)(A), (2), and (3).6  Petitioner, as a                 
          taxpayer attempting to deduct an NOL, bears the burden of                   
          establishing both the existence of the NOL and the amount of any            
          NOL that may be carried over to 1998.  Rule 142(a)(1); United               
          States v. Olympic Radio & Television, Inc., 349 U.S. 232, 235               
          (1955); Keith v. Commissioner, 115 T.C. 605, 621 (2000).  Such a            
          deduction is a matter of legislative grace; it is not a matter of           
          right.  United States v. Olympic Radio & Television, Inc., supra            
          at 235; Deputy v. du Pont, 308 U.S. 488, 493 (1940).                        

          6 In 1997, sec. 172(b)(1)(A) was amended to generally                       
          require a 2-year carryback and a 20-year carryover for NOLs                 
          incurred in taxable years beginning after Aug. 5, 1997.  Neither            
          party asserts that this amendment is applicable here, and we                
          conclude it is not.                                                         

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  Next

Last modified: May 25, 2011