Estate of Clifford C. Haugen - Page 3

                                        - 2 -                                         

               Respondent determined deficiencies of $36,077 and $2,423,              
          respectively, in petitioners' Federal income taxes for 1998 and             
          1999.2                                                                      
               The issues for decision are:  (1) In calculating the taxes             
          for the years 1998 and 1999 under the income-averaging provisions           
          of section 1301, whether net operating losses (NOL) for 2 of the            
          3 base years in the income-averaging computation, which had been            
          carried back to earlier years and for which income tax refunds              
          were received as a result of such carrybacks, should be added               
          back to the net income for such base years due to the tax                   
          benefits realized from the NOL carrybacks,3 and (2) for the year            
          1998, whether a taxpayer's election to income average under                 


               2    Clifford C. Haugen and Audrey A. Haugen were husband              
          and wife.  Mr. Haugen died testate on May 7, 1998, and Mrs.                 
          Haugen was the executrix of her late husband's estate.  For the             
          year 1998, a joint Federal income tax return was filed in the               
          name of Clifford C. Haugen, Deceased, and Audrey A. Haugen.  For            
          1999, Audrey A. Haugen filed her return as a single person.                 
          Although the record does not reflect the heirs or successors to             
          Mr. Haugen's estate, the Court assumes, and the parties have not            
          placed at issue, any question that the heir, successor, or party            
          at interest regarding Mr. Haugen's estate is petitioner Audrey A.           
          Haugen.  Consequently, the income and expenses for the year 1999,           
          reported on the 1999 Federal income tax return by Mrs. Haugen,              
          are presumed to include all interests of Mrs. Haugen's deceased             
          spouse.  For convenience, the Court refers interchangeably to               
          "petitioner" or "petitioners" to include the interests of                   
          Clifford C. Haugen, deceased, as well as those of Mrs. Haugen.              
               3    The Court's holding on the income-averaging issue for             
          the 1998 tax year also resolves the sole issue for the 1999 tax             
          year because one of the base years for 1999 is the year 1996, in            
          which a NOL was carried back, and a tax refund was received as a            
          result of the carryback.                                                    




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  Next

Last modified: May 25, 2011