- 32 -
losses to prepetition taxable years.12 We note that section
1398(j)(2)(B) applies with respect to “any carryback from a
taxable year ending after the case commences.” The use of the
all-inclusive adjective “any” in section 1398(j)(2)(B) would be
inclusive of the estate’s NOLs that are succeeded to by the
debtor. Accordingly, section 1398(j)(2)(B) prohibits only
carrybacks to precommencement years and does not place any
limitation on postcommencement years.13
The use of the bankruptcy commencement date in section
1398(j)(2)(B), to demarcate the earliest year to which a loss may
be carried back as well as the earliest year from which such a
loss may emanate, appears to favor petitioner’s position that he
may carry forward the NOLs received from the bankruptcy estate to
postcommencement years (1995 and forward). The purpose of
section 1398 is achieved during the bankruptcy by causing the
estate to be responsible for income attributable to assets which
are part of the bankruptcy estate. In that regard, the debtor is
12 No reference is made in sec. 1398(j)(2)(B) to the
carryback of precommencement NOLs to precommencement years.
Whether such a carryback is permitted is not a matter that need
be decided with respect to the factual circumstances presented in
this case.
13 We recognize that sec. 1398(g)(1) uses the word
“carryovers” in describing the attributes to which the debtor may
succeed, but the operative language, as discussed above,
indicates that the use of the word “carryovers” was not intended
as a limitation. Rather, the word “carryovers” appears to
reference the movement of the attribute from the estate to the
debtor.
Page: Previous 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 NextLast modified: May 25, 2011