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(1981); sec. 1.172-3(a)(2), Income Tax Regs. As a result, excess
capital losses are not subject to section 172 and are excluded
when computing an NOL under section 172(c).
For AMT purposes, the ATNOL deduction is applied in lieu of
section 172 in determining AMTI. Sec. 56(a)(4). An ATNOL
deduction is defined as “the net operating loss deduction
allowable for the taxable year under section 172,” subject to
exceptions under section 56(d). Sec. 56(d). Thus, an ATNOL is
computed under section 172 and then adjusted pursuant to section
56(d)(2). Sec. 56(d)(1)(B)(i). There is no exception under
section 56(d) that modifies section 172(c) or (d) to allow excess
capital losses to be used as deductions under section 172(c), or
to allow excess capital losses to be carried forward or back
under section 172(b). See Merlo v. Commissioner, supra at 212-
213. Instead, remaining capital losses are governed by a
separate carryover scheme prescribed in section 1212(b), as
described above.
Therefore, the Court finds petitioner’s excess AMT capital
losses are excluded for purposes of calculating his ATNOL
deduction. As a result, petitioner cannot carry back his AMT
capital losses realized in 2001 and 2002 under sections 56 and
172(b).
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