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determination had the effect of reducing the amount available for
carryover to the 1998 year from $118,960 to $27,424. After
obtaining evidence of petitioner's filing for 1993, respondent
moved to increase the deficiency in this case due to the
carryback of the 1996 loss to 1993 as well as the 2 subsequent
years.1
Discussion
The parties agree that petitioner incurred an operating
loss. The only issue for the Court to decide with respect to the
NOL is whether petitioner must carry it back to the 3 preceding
taxable years before any portion may be carried forward. Because
the Court decides the issue in this case without regard to the
burden of proof, section 7491 is inapplicable.
For the years involved here, a taxpayer may carry back an
NOL to the 3 years before the loss year, and then forward to each
of the 15 years following the loss year. Sec. 172(b)(1)2. A
taxpayer may elect to forgo the carryback period. Sec.
172(b)(3). The election must be made by the due date, including
extensions, for filing the taxpayer's return for the year the NOL
1In his answer, respondent alleges that "After carrying back
the NOL to 1993, the 1996 NOL carryforward to 1998 is decreased
from $91,536 stated in the notice of deficiency to $27,242".
This allegation appears to be erroneous.
2With respect to net operating losses for taxable years
beginning after the date of enactment of the Taxpayer Relief Act
of 1997, Pub. L. 105-34, sec. 1082(a)(1) and (2), 111 Stat. 950,
the carryback and carryover periods were changed.
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