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Petitioners may offset any capital gains they had in 2002
with their capital losses, and they are allowed an additional
capital loss deduction of up to $3,000 per year for the excess
losses that cannot be offset by capital gains. Sec. 1211(b).
Petitioners’ excess capital losses may be carried over to
subsequent years. Sec. 1212(b).
On their 2002 return, petitioners reported a capital loss
carryover of $38,427 from 2001 as well as a short-term capital
loss from 2002. The expenses petitioners incurred in 2002
relating to the sale of the Lakeshore property in 2001 should be
aggregated with (and increase) the capital loss carryover
petitioners already reported for 2002.
Petitioners realized no tax benefit in 2002 from the payment
of attorney’s fees relating to the disposition of their capital
asset in 2001. However, those expenditures may be beneficial in
future periods. Only the year 2002 is before us; we do not
address the treatment of petitioners’ capital losses in
subsequent years.
To reflect the foregoing and concessions by the parties,
Decision will be entered
under Rule 155.
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Last modified: November 10, 2007