Stokes v. Department of Revenue

CARL N. BYERS, Judge.

Although this case presents a narrow issue, a complete understanding of that issue requires some discussion of the background. Plaintiffs incurred a financial loss in 1981, for which they claimed a deduction on their 1981 Oregon income tax return. A small part of the loss was carried forward and claimed on their 1982 income tax return. The adverse business circumstances giving rise to the loss required Mr. Stokes to seek employment in California.

Defendant audited plaintiffs’ 1981 return and questioned the deductibility of the loss. The relevant chronology is as follows:

Pla…