- 28 -
that concept does not extend beyond the debtor and the bankruptcy
estate. In the setting of this chapter 11 bankruptcy, gains and
losses of the debtor and/or the estate would vest with the
appropriate party if “termination” occurred at the time of
confirmation.
We hold that the concept of closing an estate, as used in
section 346 of the Bankruptcy Code, is not identical for all
purposes to the phrase “termination of an estate” as used in
section 1398. To the extent that the rationale or holding of
McGuirl v. Commissioner, T.C. Memo. 1999-21, or Beery v.
Commissioner, T.C. Memo. 1996-464, indicates otherwise, it is
distinguished.
IV. Petitioner’s Use of the Net Operating Losses
Having decided that the tax attributes of the bankruptcy
estate transferred to petitioner upon the confirmation of the
plan of reorganization, we now address the parties’ disagreement
over which, if any, net operating losses (NOLs) are available to
petitioner and the years to which they may be carried. In this
motion for partial summary judgment, the parties are focused on
generalized threshold legal questions.10 Those questions concern
whether petitioner may apply losses acquired from his bankruptcy
estate upon its termination against his nonbankruptcy income
10 The parties have not addressed the specifics of the
losses, such as the amounts available and the mechanics of
application under sec. 172.
Page: Previous 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 NextLast modified: May 25, 2011