Rosenberg v. Commissioner
United States Tax Court
A corporation constructed a 15-unit condominium building in 1979, sold one unit in 1981, and rented other units until 1984. The corporation reported its income and expenses, including carrying charges of interest and taxes, under subch. C of the Code through its fiscal year ended Nov. 30, 1982, when a subch. S election was made. This election was in effect in 1984 when 13 of the remaining condominium units were sold.
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A corporation constructed a 15-unit condominium building in 1979, sold one unit in 1981, and rented other units until 1984. The corporation reported its income and expenses, including carrying charges of interest and taxes, under subch. C of the Code through its fiscal year ended Nov. 30, 1982, when a subch. S election was made. This election was in effect in 1984 when 13 of the remaining condominium units were sold. Held, the carrying charges included in the net operating losses incurred while the corporation was in subch. C status may not offset 1984 income of the S corporation passed…
1Opinion of the Court
OPINION
FEATHERSTON, Judge:
Respondent determined a deficiency in petitioners’ Federal income tax for 1984 in the amount of $151,238. The issue for decision is whether a net operating loss carryover generated by a subchapter C corporation1 in earlier years may offset income in a later year, at which time a subchapter S election is in effect for the same corporation.
All the facts are stipulated.
Petitioners, husband and wife, were legal residents of the State of California when their petition was filed. They filed a joint income tax return and an amended joint income tax return for 1984, both…
2Cases cited9 opinions
- Hillsboro National Bank v. CommissionerSupreme Court of the United States · 1983
- Fred E. Hudspeth v. Commissioner of Internal Revenue ServiceCourt of Appeals for the Ninth Circuit · 1990
- Capitol Coal Corp. v. CommissionerUnited States Tax Court · 1956
- Capitol Coal Corporation v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1957
- Home Mutual Insurance Company, Cross v. Commissioner of Internal Revenue, CrossCourt of Appeals for the Seventh Circuit · 1980
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3Cited by9 opinions
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- Amorient, Inc. v. CommissionerUnited States Tax Court · 1994
- St. Charles Inv. Co. v. CommissionerUnited States Tax Court · 1998
- Bressi v. CommissionerUnited States Tax Court · 1991
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