Sidney Axelrod and Andrea Axelrod v. Commissioner of Internal Revenue

McCREE, Circuit Judge.

This appeal requires us to define the relationship between the alternative capital gains tax provisions of section 1201(b) of the Internal Revenue Code of 1954, 26 U.S.C. § 1201(b), and the net operating loss carryback and carryover provisions of section 172 of the Code, 26 U.S.C. § 172. Specifically, we must determine whether “taxable income,” against which section 172 of the Internal Revenue Code requires a net operating loss carried back to an earlier year to be offset in determining whether there will be an excess to carry forward to other years comprehends only…