Arthur Beyer Catherine A. Beyer v. Commissioner of Internal Revenue

JOSEPH H. YOUNG, Senior District Judge;

This appeal presents an issue of first impression in this court concerning the carry-over provision of § 163(d)(2) of the Internal Revenue Code (IRC). The Tax Court held that the carry-over is subject to an implicit limitation equal to the taxpayer’s total taxable income for the year in which the expense was incurred. After reviewing the language of the statute and the legislative history behind the carry-over provision, we conclude the Congress intended no such limitation and reverse the judgment below.

I

In 1981, Arthur and Catherine Beyer, the taxpayers…