- 4 -
In the notice of deficiency for the subject years,
respondent determined that petitioner was not entitled to deduct
any of the claimed NOL carryovers but, as to 1997, that
petitioner was entitled to deduct a capital loss of $3,000.
Respondent determined in the notice of deficiency that petitioner
was no longer entitled to deduct a $3,000 capital loss for either
1998 or 1999.
OPINION
Petitioner argues in his brief that he is entitled to deduct
the NOL carryovers at issue. According to petitioner, those
carryovers are attributable to a theft that petitioner suffered
in that “in essence Paine Webber stole his money from him by
supplying him with alcoholic beverages and allowed him to make
unwise investments that benefitted them directly” in the form of
higher commissions. We disagree with petitioner’s claim that he
is entitled to deduct those NOL carryovers.
Section 172 allows a taxpayer to deduct an NOL for a taxable
year. The amount of the NOL deduction equals the sum of the NOL
carryovers plus NOL carrybacks to that year. Sec. 172(a); see
also sec. 172(c) (NOL defined) and (d)(4)(C) (special rule as to
casualty or theft losses allowable under section 165(c)(2) or
(3)). Absent an election to the contrary, an NOL for any taxable
year must first be carried back 3 years and then carried over 15
Page: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011