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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.
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