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capital loss carryover from 2000 was claimed thereon, inasmuch as
they had not reported a long-term capital loss on their 2000
joint Federal income tax return. At trial, petitioner’s
accountant stated that the $192,046 amount of the claimed 2000
long-term capital loss carryover was not precise and was based on
an estimate.
As of the date of the trial, petitioner and his wife have
not filed an amended Federal income tax return for 2000, and
petitioner and his wife have not otherwise claimed a long-term
capital loss for 2000.
OPINION
Under section 165(g), securities which are capital assets
that become worthless during a taxable year are “treated as a
loss from the sale or exchange, on the last day of the taxable
year, of a capital asset.” Sec. 165(g)(1).
For purposes of section 165(g), a security is defined as
either a share of stock in a corporation, or a right to subscribe
for, or to receive, a share of stock in a corporation. Sec.
165(g)(2).1
To qualify for a capital loss deduction under section
165(g), a stock interest in a corporation must be wholly
worthless. Sec. 1.165-5(c), Income Tax Regs. Whether a stock
1The definition of security under sec. 165(g)(2) also
includes certain debt instruments not relevant to this case.
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