- 10 -
(9th Cir. 1999); Leavell v. Commissioner, T.C. Memo. 1996-117.
III. The Net Operating Losses Available to Petitioner
Petitioner, in his summary judgment motion in Benton I,
contended that he had succeeded to: (1) Prebankruptcy NOLs in an
amount not less than $50 million and (2) NOLs generated by the
Benton estate in an amount not less than $100 million.
Petitioner now acknowledges that the alleged $50 million in
prebankruptcy NOLs is unallowable for his 1995, 1996, and 1997
tax years under paragraph 8 of the settlement agreement. The
first sentence of paragraph 8 provides that petitioner would not
be allowed any net operating losses under section 172 that arose
in taxable periods before the bankruptcy petition date which
might be carried forward to any taxable period of the Benton
estate.
Petitioner continues to contend, however, that any NOLs
attributable to the $84 million in suspended passive activity
losses are not prebankruptcy NOLs that would be covered under the
first sentence of paragraph 8 of the settlement agreement.
According to petitioner, nothing in the settlement agreement
prohibits NOLs generated by the Benton estate, to the extent not
used by the Benton estate and to the extent petitioner succeeds
to them, from being carried to, and used by him for, his 1995,
1996, and 1997 tax years. He maintains that approximately $80
million in NOLs attributable to the $84 million in suspended
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