Michael E. Yoakum - Page 4

                                        - 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