Oren L. Benton - Page 30

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          bankruptcy termination (the year in which petitioner succeeded to           
          the NOLs from the bankruptcy estate).  Petitioner argues that he            
          may apply losses of the bankruptcy estate that he succeeded to at           
          confirmation to any year after the commencement of the bankruptcy           
          (1995 and later).  Petitioner also argues that he may apply his             
          own prebankruptcy NOLs, to the extent not used by the bankruptcy            
          estate, to his tax years following the commencement of the                  
               Section 1398 was enacted to provide rules relating to the              
          Federal tax regimen to be used in connection with individuals’              
          chapter 7 or chapter 11 bankruptcies under title 11, U.S.C.  See            
          sec. 1398(a).  Section 1398, among other matters, addresses                 
          questions concerning which entity is to recognize income and when           
          either entity may succeed to the tax attributes of the other.               
          Ultimately, the question we consider is whether the estate                  
          becomes the preeminent or sole taxpayer (to petitioner’s                    
          exclusion) for purposes of application of NOLs to income for                
          years occurring during the bankruptcy proceeding.  At the                   
          commencement of the bankruptcy, the estate becomes a taxable                
          entity treated as an individual taxpayer with respect to the                
          computation of income from assets being administered in the                 
          estate under title 11, U.S.C.  The debtor continues as a separate           
          taxable entity during the pendency of the bankruptcy, with                  
          respect to income that the bankruptcy estate is not entitled to             

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