Nelson v. Commissioner

BRISCOE, Circuit Judge.

The Commissioner of Internal Revenue assessed a tax deficiency against Mel T. Nelson after determining Nelson had improperly utilized excluded discharge of indebtedness income to adjust his subchap-ter S corporate basis. The United States Tax Court upheld the Commissioner’s deficiency determination and Nelson appeals. We exercise jurisdiction pursuant to 26 U.S.C. § 7482(a)(1) and affirm.

Nelson was the sole shareholder of Metro Auto, Inc., a subchapter S corporation. In 1991, Metro Auto had $654,788 in net operating losses. The corporation also realized $2,030,568 in…