- 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