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1. Held: Sec. 382(l)(3)(A)(i), I.R.C., which
provides that an “individual” and all members of his
family described in sec. 318(a)(1), I.R.C. (i.e., his
spouse, children, grandchildren, and parents) are
treated as one individual for purposes of applying sec.
382, applies solely from the perspective of individuals
who are shareholders (as determined under applicable
attribution rules) of the loss corporation.
2. Held, further, A and B are not treated as one
individual under sec. 382(l)(3)(A)(i), I.R.C.
3. Held, further, A’s sale of his P shares to B
resulted in an ownership change with respect to P
within the meaning of sec. 382(g), I.R.C.
George W. Connelly, Jr., Linda S. Paine, and Phyllis A.
Guillory, for petitioner.
Susan K. Greene and Marilyn S. Ames, for respondent.
HALPERN, Judge: By notice of deficiency dated June 21,
2001, respondent determined deficiencies in petitioner’s Federal
income taxes for petitioner’s 1997 and 1998 taxable (calendar)
years in the amounts of $4,916 and $301,835, respectively. The
parties have settled all issues save one, leaving for our
decision only the question of whether a 1998 stock sale between
siblings that increased one sibling’s percentage ownership of
petitioner by more than 50 percentage points resulted in an
ownership change for purposes of section 382, triggering that
section’s limitation on net operating loss (NOL) carryovers.1
1 The parties have stipulated that (1) if the sec. 382
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