- 20 -
At the bottom of petitioners’ 1998 Form 4797, petitioners indi-
cated that the ordinary loss of $11,541 claimed in that form was
attributable to the “ENTIRE DISP OF PAS ACT” conducted by Kildare
Timmy.
On May 17, 1999, petitioners jointly filed Form 1045,
Application for Tentative Refund (Form 1045), for each of the
taxable years 1996 and 1997, in which they claimed refunds based
on an alleged NOL for 1998 that they carried back from that year
to each of those earlier years. The claimed NOL for 1998 was
attributable to petitioners’ having treated as nonpassive losses
in petitioners’ 1998 return petitioners’ passive losses (i.e.,
ordinary passive losses and petitioners’ section 1231 passive
losses)15 attributable to Kildare Timmy. Form 1045 showed the
following:
2d preceding 1st preceding
tax year ended 1996tax year ended 1997
Before After Before After
carrybackcarryback carrybackcarryback
Adjusted gross income from tax$369,867 $369,867 $402,727 $402,727
return or as previously adjusted
Net operating loss deduction 0 360,918 0 124,219
after carryback
Deductions 133,168 133,168 316,113 316,113
Taxable income 236,699 (124,219) 86,614 (37,605)
Income tax 69,543 0 18,899 0
Total tax liability 69,543 0 18,899 0
Form 1045 also showed decreases of $69,543 and $18,899 in peti-
15The parties stipulated that the respective amounts of
ordinary passive losses and sec. 1231 passive losses that peti-
tioners claimed were attributable to Kildare Timmy were incorrect
and stipulated the correct amount of each such loss.
Page: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 NextLast modified: May 25, 2011