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This matter is before the Court on respondent’s motion for
partial summary judgment. See Rule 121.1 The issues presented
for our consideration are: (1) Whether petitioner succeeded to
the tax attributes of his chapter 11 bankruptcy estate at the
time of confirmation of the plan of reorganization or,
alternatively, upon entry of a final order closing the bankruptcy
proceeding, see sec. 1398(i); (2) whether petitioner may carry
net operating losses (NOLs) to his 1995, 1996, and 1997 tax
years; and (3) whether certain payments petitioner received were
compensation for his services.
Background
Petitioner resided in Oto, Iowa, at the time his petition
was filed in this proceeding. On February 23, 1995, petitioner
filed a voluntary petition with the U.S. Bankruptcy Court for the
District of Colorado under chapter 11 of the Bankruptcy Code.
Concurrently, four related petitions were filed for business
entities controlled by petitioner. An additional entity
controlled by petitioner filed a petition under chapter 11 during
1996. All six bankruptcy cases were administered as a related
group. A separate bankruptcy estate was established for each
entity, including the Oren L. Benton Bankruptcy Estate (Benton
1 Unless otherwise indicated, all Rule references are to the
Tax Court Rules of Practice and Procedure, and all section
references are to the Internal Revenue Code in effect for the
taxable years at issue.
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Last modified: May 25, 2011