TAX COURT OPINION

Case: Bryce E. & Michelle S. Nemitz
Docket Number: 17507-05
Judge: Chiechi
Opinion Type: reported
Filed: 05/15/2008
Pages: 22

I ADM . RECORDED SERVICE )7 CAL . STAT . JUDGE FILE S 130 T .C . No . 9 UNITED STATES TAX COUR T BRYCE E . AND MICHELLE S . NEMITZ COMMISSIONER OF INTERNAL REVE E Petitioners v . rUE, Responden t Docket No . 17507-05 . Filed May 15, 2008 . Held : The period of limitati ns in sec . 6501(h) , I .R .C ., applies with respect to the deficiency for each of Ps' taxable years 1999 and 2000 that is attributable to the carryback to each of those ears of a claimed net operating loss for alternative minimum tax purposes . Burns Mossman and Bruce W . Baker , f or petitioners . Lisa K . Hunter , for respondent . SERVED MAY 1 5 2008 - 2 - OPINION CHIECHI, Judge : Respondent determined deficiencies of $53,942, $1,476,656, and $21,092 in petitioners' Federal income tax (tax) for their taxable years 1999, 2000, and 2001, respec- tively . We must decide whether the period of limitations in section 6501(h)' applies with respect to the deficiency for each of petitioners' taxable years 1999 and 2000 that is attributable to the carryback to each of those years of a claimed net operating loss for alternative minimum tax purposes . We hold that it does . All of the facts in this case, which the parties submitted under Rule 122, have been stipulated by the parties and'are so found except as stated below . 2 Petitioners resided in Cedar Rapids, Iowa, at the time they filed the petition in this case . 'All section references are to the Internal Revenue Code (Code) in effect for the years at issue . All Rule references are to the Tax Court Rules of Practice and Procedure . . 2In the parties' stipulation of facts, respondent objected to the admission of one of the exhibits attached to that stipulation . That exhibit consisted of a memorandum relating to "ISO and AMT Issues" that petitioners claim their accountant used for purposes of computing the tax reported in the amended return that petitioners filed for each of their taxable years 1999, 2000, and 2001 . We sustain respondent's objections on the grounds of relevance, see Fed . R . Evid . 401, and hearsay, see Fed . R . Evid . 801(c) . - 3 - During 1997 through 2001 , McLeodUS . Incorporated ( McLeod), employed petitioner Bryce E . Nemitz (Mr Nemitz ) as its vic e president of investor relations and cor ; ED orate communications . During Mr . Nemitz's employment, McLeod ranted certain options to him to purchase shares of its common st ED ck . All of those options qualified as incentive stock options ( I Os) . During each of the years 1997, 199 and 2000, Mr . Nemitz exercised at least certain of the ISOs hat McLeod granted to him (McLeod ISOs ) . For each of those taxab e years, petitioners wer e required to include as part of their alternative minimum taxable income the spread between the exercise rice of each McLeod ISO that Mr . Nemitz exercised and the date - f-exercise fair market value of the McLeod stock that he acqui ed . During 2001 , Mr . Nemitz sold certain of the McLeod stoc k that he acquired during each of the years 1997, 1998 , and 2000 through the exercise of certain McLeod SOs . The proceeds that Mr . Nemitz received from each of those ales were less than the date - of-exercise fair market value of t e McLeod stock sold . Petitioners timely filed Form 1040, U .S . Individual Income Tax Return ( return), for each of their taxable years 1999 (1999 return ), 2000 ( 2000 return ), and 2001 (2001 return ) . Petitioners included Form 6251, Alternative Minimum Tax - Individuals (Form 6251 ), as part of the 1999 return ( 1999 Form 6251 ), the 2000 return ( 2000 Form 6251), and the 2001 r turn ( 2001 Form 6251) . - 4 - Petitioners also included Form 8801, Credit For Prior Year Minimum Tax - Individuals, Estates, and Trusts (Form 8801), as part of the 1999 return (1999 Form 8801), the 2000 return (2000 Form 8801), and the 2001 return (2001 Form 8801) . In the 1999 return, petitioners reported on page 2 taxable income of $1,748,707 and tax of $354,228 . In the 1999 Form 6251, petitioners reported alternative minimum taxable income of $1,279,154,3 tentative alternative minimum tax (tentative AMT) of $262,619, and no alternative minimum tax (AMT) . In the 1999 Form 8801, petitioners claimed an AMT credit of $91,609 and an AMT credit carryforward to 2000 of $53,942 . On page 2 of the 1999 return, petitioners reduced the tax of $354,228 that they re- ported on that page by the AMT credit of $91,609 that they claimed in the 1999 Form 8801 and reported total tax of $262,619 . In the 2000 return, petitioners reported on page 2 no taxable income and no tax . In the 2000 Form 6251, petitioners reported alternative minimum taxable income of $9,283,465,4 tentative AMT of $2,595,870, and .AMT of $2,595,870 . In the 2000 Form 8801, petitioners claimed an AMT credit carryforward to 2001 of $53,023 . On page 2 of the 2000 return, petitioners reporte d 3In calculating alternative minimum taxable income reported in the 1999 Form 6251, petitioners claimed no alternative tax net operating loss deduction . 4In calculating alternative minimum taxable income reported in the 2000 Form 6251, petitioners claimed no alternative tax net operating loss deduction . - 5 - AMT of $2,595 , 870 that they reported in the 2000 Form 6251 and total tax of $2,595,870 . In the 2001 return, petitioners reported on page 2 taxable income of $ 2,188,6515 and tax of $433,211) . In the 2001 Form 6251, petitioners reported alternative minimum taxable income of $130,122,6 tentative AMT of $21,092 , and no AMT . In calculating in the 2001 Form 6251 that they had alternative minimum taxable income of $ 130,122, petitioners claimed an adjusted loss of $2,563,879 . ' In the 2001 Form 8801 , petitioners claimed an AMT credit of $ 412,118 and an AMT credit ca ryforward to 2002 of $2,220 , 436 . On page 2 of the 2001 return, petitioners reduced the tax of $433,210 that they reported on that page by the AMT credit of $412,118 that they claimed in the 2001 Form 8801 and reported total tax of $21,092 . 5In calculating taxable income reported on page 2 of the 2001 return , petitioners included capital gain of $2,560,879 that they reported on page 1 of that return . 6In calculating alternative minimum taxable income reported in the 2001 Form 6251 , petitioners clai ed no alternative tax net operating loss deduction . 7In the 2001 Form 6251 , petitioner : loss to $2,563 , 879, which is equal to t gain of $2,560 , 879 that they reported o return and ( 2) $3,000 . See supra note native minimum taxable income reported petitioners included no "excess of AMT income" with respect to incentive stock limited the adjusted e total of ( 1) capita l page 1 of the 200 1 In calculating alter- n the 2001 Form 6251, ncome over regular tax options . - 6 - On November 3, 2002, pursuant to Revenue Procedure 2002-40, 2002-1 C .B . 1096,8 petitioners filed Form 1040X, Amended U .S . Individual Income Tax Return (amended return), with respect to each of their taxable years 1999 (1999 amended return), 2000 (2000 amended return), and 2001 (2001 amended return) .9 Peti- tioners included Form 6251 as part of the 1999 amended return (1999 amended Form 6251), the 2000 amended return (2000 amended Form 6251), and the 2001 amended return (2001 amended Form 6251) . Petitioners also included Form 8801 as part of the 1999 amended return (1999 amended Form 8801), the 2000 amended return (2000 amended Form 8801), and the 2001 amended return (2001 amended Form 8801) . Petitioners included Schedule A-NOL of Form 1045, Application for Tentative Refund, as part of the 2001 amended return (2001 Schedule A) . In the 2001 amended return, petitioners claimed a refund of $21,092 (claimed 2001 refund) . In that amended return, petition- ers showed in pertinent part : 'Secs . 6 .01 and 7 of Rev . Proc . 2002-40, 2002-1 C .B . 1096, 1098, provide procedures that certain taxpayers who incurred net operating losses during 2001 or 2002 must follow on or before Oct . 31, 2002, in order to elect to forgo the five-year carryback period in sec . 172(b) (1) (H) . 9Petitioners attached copies of certain pages of (1) the . 1999 return to the 1999 amended return, (2) the 2000 return to the 2000 amended return, and (3) the 2001 return to the 2001 amended return . - 7 - A . Original B . Net hange - C . Correc t amount or as previously adjusted * * * amou t of incr ase o r (dec rease ) * * * amoun t 2,729,959 . 541,308 . 2,188,651 . 2,188,651 . 433,210 . 412,118 . 21,092 . NONE (1)21,0 2 . -21,0 )2 . 2,729,959 . 541,308 . 2,188,651 . NONE 2,188,651 . 433,210 . 433,210 . NON E 12121,092 . -21,0 2 . NONE Income and Deduction s 1 Adjusted gross income * * * 2 Itemized deductions or standar d deduction 3 Subtract line 2 from line 1 * * * 4 Exemptions . * * * 5 Taxable income . Subtract line 4 from line 3 * * * 6 Tax * * * 7 Credits * * * 8 Subtract line 7 from line 6 . Enter the resul t but not les s than zero * * * 9 Other taxes * * 10 Total tax . . Add lines 8 and 9 * * 'The amount of " Net change " in credits that p titioners claimed in the 2001 amended return is equal to the difference between t e amount of AMT credit that they claimed in the 2001 Form 8801 and the amount of AMT credit that they claimed in the 2001 amended Form 8801 . See infr a note 11 . 'An unidentified person drew by hand a line t rough the total tax of $21,092 shown in the 2001 amended return as the total tax r ported in the 2001 return and handwrote "20,492" . Although the record does not e plain those handwritten notations, the record establishes that $21,092 was the amount f total tax reported in the 2001 return and the amount of the refund claimed in the 001 amended return . However, as discussed infra note 14, the record further establi hes, without explanation, that the refund that respondent paid to petitioners with res ect to their taxable year 2001 is equal to the total of (1) $20,492 of the claimed 2001 refund of $21,092 an d (2) $956 .34 of interest . In arriving at the correct amount of total tax reported i n the 2001 amended return, petitioners reported alternative minimu m taxable income of negative $6,552,925, no tentative AMT, and no AMT in the 2001 amended Form 6251 . In calculating in the 2001 amended Form 62.51 that they had altern tive minimum taxabl e income of negative $6,552,925, petitio ers claimed (1) $71,304 as 8 - an adjusted loss and (2) negative $9,175,622 as "excess of AM T income over regular tax income" with respect to incentive stock options .1° In the 2001 amended Form 8801, petitioners claimed an AMT credit of $433,21011 and an AMT credit carryforward to 2002 of $669,665 . In the 2001 Schedule A, petitioners claimed a net operating loss for AMT purposes of $6,552,925 . Petitioners included with the 2001 amended return the following explanation of changes to income, deductions, and credits : Enter excess of AMT income over regular tax The taxpayers are amending this return to correct the lines 9 and 10 of Form 6251 (Alternative Minimum Tax - Individuals) . In prior years, Bryce Nemitz exercised numerous incentive stock options and reported th e difference between the exercise price and the fair market value on the date of exercise as a tax preference on Form 6251 on the line labeled "Incentive stock options . income" . In 2001, the shares acquired by the option exercises were sold at a price below the fair market value on the date of exercise . On their original return, the taxpayers reported this difference betwee n the amount of income previously reported on Form 625 1 and the income reported for regular tax for 2001 on Form 6251, line 9 "Adjusted gain or loss . Enter dif - ference between AMT and regular tax gain or loss" . This negative adjustment was limited to the amount of capital gain reported for regular tax plus $3,000 . 10See supra note 7 . In the 2001 amended Form 6251, peti- tioners did not limit the negative $9,175,622 that they claimed as "excess of AMT income over regular tax income" with respect to incentive stock options to the total of (1) capital gain of $2,560,879 that they reported on page 1 of the 2001 return and (2) $3,000 . "The amount of AMT credit that petitioners claimed in the 2001 amended Form 8801 exceeds the amount of AMT credit that they claimed in the 2001 Form 8801 by $21,092 . - 9 - This original reporting is consist instructions to Form 6251 . nt with the IRS On this amended return, the taxpay negative adjustment described abov 10, and are not limiting the adjus loss for alternative minimum tax p believe this negative adjustment c minimum tax net operating loss tha to prior years to offset alternati income . rs are reporting the e on Form 6251, lin e ment as a capital rposes . Taxpayers eates an alternative can be carried back -e minimum taxabl e The taxpayers' basis for this Chan, States Supreme Court decision in t : Arrowsmith 42 AFTR 649 : aff'g CA-2 in Arrowsmith held for the IRS tha a capital gain on an initial trans loss on a related transaction had Arrowsmith should apply for altern purposes as well . In this situati transaction (exercise of the incen was ordinary income for alternativ therefore the subsequent sale at a treated as an ordinary loss . e is the United e case of F . Donald The Supreme Cour t when a taxpayer ha d ction, a subsequent o be capital also . tive minimum tax mn, the origina l ive stock options ) minimum tax : H loss should also b e Petitioners also attached a supple ent to the 2001 amende d return in which they stated : ELECTION TO WAIVE THE 5 YEAR CARRYBACK AND SUBSTITUTE A 2 YE A OPERATING LOS S t CARRYBACK PERIOD . THE ABOVE-NAME TAXPAYER INCURRED A IN THE TAXABLE YEAR ENDING DECEMBE ENTITLED TO A FIVE YEAR PERIOD WIT LOSS UNDER CODE SECTION 172(B)(I)( REVENUE CODE . NET OPERATING LOS S 31, 2001, AND IS RESPECT TO THAT OF THE INTERNAL PURSUANT TO CODE SECTION 172(J) TH WAIVE THE PROVISIONS WITH CODE SEC 5 YEAR OPERATING LOSS CARRYBACK) A PROVISIONS OF SECTION 172(B)(1)(A) ING LOSS CARRYBACK) . 1121 [Reproduce TAXPAYER ELECTS T O ION 172(B) (1) (H) ( A 11 INSTEAD APPLY TH E I) (A 2 YEAR OPERATd literally . ] 12See supra note 8 . - 10 - On February 3, 2003, respondent paid to petitioners a refund of $21,448 .3413 with respect to their taxable year 2001 (2001 refund) .14 In the 1999 amended return, petitioners claimed a refund of $53,942 . In that amended return, petitioners showed in pertinent part : 13The parties stipulated that on Feb . 3, 2003,, respondent paid to petitioners a refund of $21,488 .34 with respect to their taxable year 2001 . That stipulation is clearly contrary to the facts that we have found are established by the record, and we shall disregard it . See Cal-Maine Foods, Inc . v . Commissioner , 93 T .C . 181, 195 (1989) . The record establishes, and we have found, that on Feb . 3, 2003, respondent paid to petitioners a refund of $21,448 .34 with respect to their taxable year 2001 . 14The amount of the 2001 refund is equal to the total o f (1) $20,492 of the claimed 2001 refund of $21,092 and (2) $956 .34 of interest . The record does not explain why respondent did not refund the entire amount of the $21,092 that petitioners claimed in the 2001 amended return . See table note 2, supra p . 7 . - 11 - A . Original B . Ne t change - C . Correc t amount or as previously adjusted * * * 1,778,670 . 29,963 . 1,748,707 . NONE 1,748,707 . 354,228 . 91,609 . 262,619 . Income and Deduction s 1 Adjusted gross income * * * 2 Itemized deductions o r standard deductio n 3 Subtract line 2 from line 1 * * * 4 Exemptions . * * * 5 Taxable income . Subtract line 4 from line 3 * * * 6 Tax * * * 7 Credits * * * 8 Subtract line 7 from line 6 . Enter the resul t but not les s than zero * * * am ount of in crease o r ( ecrease ) * * * NONE 11153 942 . -53, 942 . amoun t 1,778,670 . 29,963 . 1,748,707 . NONE 1,748,707 . 354,228 . 145,551 . 208,677 . 9 . Other taxes * * * 10 Total tax . Add lines 8 and 9 * * * 262,619 . NO -53, 942 . NONE 208,677 . 'The amount of " Net change " in credits that p titioners claimed in the 1999 amended return is equal to the difference between the amount of AMT credit that they claimed in the 1999 Form 8801 and the amount of AMT credit that they claimed in the 1999 amended Form 8801 . See infra note 16 . In arriving at the correct amount f total tax reported in the 1999 amended return, petitioners reported no alternative minimum taxable income, no tentative AMT, and no AMT in the 1999 amended Form 6251 . In calculating in the 1999 amended Form 6251 that they had no alternative minimum taxable income, petitioners carried back the net operating loss for AMT purposes of $6,552,925 that they claimed in the 200 amended return and claimed an alternative tax net operating loss deduction of 12 - $1,279,154 .15 In the . 1999 amended Form 8801, petitioners claimed an AMT credit of $145,55116 and no AMT credit carryforward to 2000 . On December 9, 2002, respondent paid to petitioners a refund of $53,942 with respect to their taxable year 1999 (1999 refund) . In the 2000 amended return, petitioners claimed a refund of $1,476,656 . In that amended return, petitioners showed in pertinent part : 15See supra note 3 . 16The amount of AMT credit that petitioners claimed in the 1999 amended Form 8801 exceeds the amount of AMT credit that they claimed in the 1999 Form 8801 by $53,942 . - 13 - A . Original B . Net change - C . Correc t amount or as previously adjusted * * * amo unt of inc rease or ( d crease ) * * amount 193,273 . 250,333 . -57,060 . 11,200 . -68,260 . 193,273 . 250 .333 . -57,060 . 11,200 . -68,260 . 2,595,870 . [1)-1, 476,656 . 1,119,214 . 2,595,870 . -1, 476,656 . 1,119,214 . Income and Deduction s 1 Adjusted gross income * * * 2 Itemized deductions o r standard deductio n 3 Subtract line 2 from line 1 * * * 4 Exemptions . * * * 5 Taxable income . Subtract line 4 from line 3 6 Tax * * * 7 Credits * * * 8 Subtract line 7 from line G . Enter the resul t but not les s than zer o 9 Other taxe s 10 Total tax . Add lines 8 and 9 * * * 2,595,870 . -1 476,656 . 1,119,214 . The amount of "Net change " in tax that petitioners claimed in the 2000 amended return is equal to the difference between the amount of AMT that they reported in the 2000 Form 6251 and the amount of AMT that they repo ted in the 2000 amended Form 6251 . See infra note 17 . In arriving at the correct amount Of total tax reported in the 2000 amended return, petitioners reported alternative minimum taxable income of $4,009,694, tentativelAMT of $1,119,214, an d AMT of $1,119,21417 in the 2000 amended Form 6251 . In calculat- ing in the 2000 amended Form 6251 that they had alternativ e minimum taxable income of $4,009,694, petitioners carried bac k the net operating loss for AMT purposes of $6,552,925 that the y 17The amount of AMT that petitioner reported in the 2000 Form 6251 exceeds the amount of AMT that they reported in the 2000 amended Form 8801 by $1,476,656 . - 14 - claimed in the 2001 amended return and claimed an alternative tax net operating loss deduction of $5,273,771 .18 Petitioners claimed no AMT credit carryforward to 2001 in the 2000 amended Form 8801 . On March 4, 2003, respondent paid to petitioners a refund of $1,476,656 with respect to their taxable year 2000 (2000 refund) . Pursuant to section 6501(c)(4), on November 1 and 5, 2004 , respectively, petitioners and respondent executed Form 872, Consent to Extend the Time to Assess Tax, in which they consented to extend the time within which to assess petitioners' tax for their taxable year 2001 to September 30, 2005 . On June 27, 2005, respondent issued to petitioners a notice of deficiency (notice) with respect to their taxable years 1999, 2000, and 2001 . In the notice, respondent determined tha t Losses realized on the sale of-stock acquired through exercise of an incentive stock option are subject to the limitations applicable to capital transactions . Consequently, such sale does not give rise to an adjustment in determining Alternative Minimum Tax taxable income . Accordingly, the Alternative Minimum Tax net operating loss claimed for 2001 has not been allowed . In the notice, respondent also determined that, because of the disallowance of the claimed net operating loss for AMT purposes for their taxable year 2001, petitioners are not entitled to carry back any portion of that claimed net operating loss to each of their taxable years 1999 and 2000 . The amount of the defi- 18See supra note 4 . - 15 - ciency that respondent determined in th notice for petitioners' taxable year 1999 is equal to the amoun of the 1999 refund . The amount of the deficiency that responde n determined in the notic e for petitioners* taxable year 2000 is e ual to the amount of the 2000 refund . The amount of the deficie cy that responden t determined in the notice for petitioner ' taxable year 2001 is equal to the amount of the claimed 200 1 refund (i .e ., $21,092) .19 That the parties submitted this ca e fully stipulated under Rule 122 does not affect who has the bu den of proof or th e effect of a failure of proof . Rule 122 b) ; Borchers v . Commis- sioner , 95 T .C . 82, 91 (1990), affd . 94 F .2d 22 (8th Cir . 1991) . Although petitioners bear the burden of proof in this case, Rule 142(a), resolution of the issue present d here does not depend o n who has the burden of proof . Petitioners agree (1) that respondent correctly determine d that the losses that they realized duri g 2001 with respect t o Mr . Nemitz's sale of certain McLeod sto k are capital losses and (2) that for AMT purposes they, as nonc rporate taxpayers, may not carry back to each of their taxable years 1999 and 2000 the net capital loss that they agree they h ve for 2001 , see sec . 1212(b) ; Merlo v . Commissioner , 126 T .C . 205 (2006), affd . 492 F .3d 618 (5th Cir . 2007) . Petitioners lso agree that, because of the foregoing uncontested determinat ons of respondent , 19See supra note 14 . - 16 - respondent correctly determined the deficiency with respect t o each of petitioners' taxable years 1999, 2000, and 2001 .2 0 addition, petitioners concede that the period of limitations for the assessment of the deficiency that respondent determined for petitioners' taxable year 2001 has not expired . The only dispute between the parties relates to the applica- ble period of limitations with respect to each of petitioners' taxable years 1999 and 2000 . We must determine whether, as respondent argues, the period of limitations in section 6501(h) applies or whether, as petitioners argue, the period of limita- tions in section 6501(a) applies .2 1 Statutes of limitations that bar the rights of the Govern- ment are to be strictly construed in favor of the Government . Badaracco v . Commissioner , 464 U .S . 386, 391 (1984) ; E .I . DuPont De Nemours & Co . v . Davis , 264 U .S . 456, 462 (1924) ; see also Bufferd v . Commissioner , 506 U .S . 523, 527'n .6 (1993) . Section 6501(h) on which respondent relies provides in pertinent part : 20See supra note 14 . "Respondent does not dispute that if sec . 6501(a) applies with respect to each of petitioners' taxable years 1999 and 2000, the period of limitations for the assessment of the deficiency that respondent determined for each of those years has expired . Petitioners do not dispute that if sec . 6501(h) applies with. respect to each of petitioners' taxable years 1999 and 2000, the period of limitations for the assessment of the deficiency that respondent determined for each of those years has not expired . - 17 - In the case of a deficiency attrib cation to the taxpayer of a net op carryback * * * such deficiency ma time before the expiration of the deficiency for the taxable year of loss * * * which results in such c assessed . table to the applirating los s be assessed at any eriod within which a the net operating rryback may b e s rely provides in pertinent part : "Except as otherwise p ovided in this section , the amount of any tax imposed * * * sh a 1 be assessed within 3 years after the return was filed" . support of their posi- tion that the period of limitations i n ection 6501(a), and not the period of limitations in section 65 1(h), applies, petition- ers advance two principal arguments . We first address petitioners' arg u Under section 6501(h) the only sit statute of limitations is kept ope loss year for noncorporate taxpaye deficiencies attributable to a ne t carryback since such taxpayers can loss carryback . ations where the by reference to a s is in the case of operating los s of have a capita l * * * for 2001 there was no AMT ne Rather there was an AMT capital lo could not be carried back * * * . therefore expressly not applicable situation . operating loss . s for 2001, which ection 6501(h) is to this factua l As we understand it, petitioners a e arguing that in the 2001 amended return they claimed a capi al loss, and not a net operating loss, for AMT purposes with r spect to Mr . Nemitz' s sale during 2001 of certain McLeod stoc and that in the 199 9 amended return and the 2000 amended ret rn they carried back that capital loss . - 18 - The record belies petitioners' argument . For example, in the explanation of changes to income, deductions, and credits that petitioners included with the 2001 amended return, petition- ers stated in pertinent part : On this amended return, the taxpayers are reporting the negative adjustment described above on Form 6251, line 10, and are not limiting the adjustment as a capital loss for alternative minimum tax purposes . Taxpayers believe this negative adjustment creates an alternative minimum tax net operating loss that can be carried back to prior years to offset alternative minimum taxable income . The taxpayers' basis for this change is the United States Supreme Court decision in the case of F . Donald Arrowsmith 42 AFTR 649 : aff'g CA-2 . * * * In this situation, the original transaction (exercise of the incentive stock options) was ordinary income for alternative minimum tax : therefore the subsequent sale at a loss should also be treated as an ordinary loss . The record establishes, and we have found, that petitioners claimed a net operating loss, and not a capital loss, for AMT purposes in the 2001 amended return and that they carried back that net operating loss for AMT purposes in the 1999 amended return and the 2000 amended return . We turn now to petitioners' argument tha t Section 6501(h) refers only to a "deficiency attributable to the application to the taxpayer of a net operating loss carryback ." No mention is made in section 6501(h) of an alternative tax capital loss or an alternative minimum tax loss carryback . While statutes of limitation barring assessment of taxes must be strictly construed in favor of the government, statutes are to be construed so as to give effect to their plain and ordinary meaning and all parts of a statute must be - 19 - read together and each part should effect . * * * To give full effect between the regular tax and altern the term "net operating loss carry 6501 ( h) should not be considered t equivalent of "alternative minimum "alternative capital loss carryba c be given its ful l o the differences tive minimum tax, ack" in section e same as or the tax carryback" o r As we understand it, petitioners a e arguing that, because section 6501 ( h) refers only to a net op rating loss carryback , and not to a net operating loss carryba k for AMT purposes, that section does not apply to the deficienc for each of their taxable years 1999 and 2000 that is at t ibutable to the carryback to each of those years of the net opera ing loss for AMT purposes that they claimed in the 2001 amended r turn . Section 6501 ( h) applies in the cas of a deficiency attrib- utable to the application of a net oper ting loss carryback . Th e only provision in the Code that allow s net operating loss carryback is section 172(b ) . 22 That sec ion, which is entitle d "Net Operating Loss Carrybacks and Carr overs", allows, inter alia, a taxpayer to carry back a net op rating loss . Sectio n 22In 1986 , Congress added sec . 56( a Tax Reform Act of 1986 , Pub . L . 99-514, 2323, 2325 - 2326 . Sec . 56(a)(4) allows operating loss .for AMT purposes . Sec . "alternative tax net operating loss ded operating loss deduction allowable for section 172" with certain adjustments t deduction allowable under sec . 172 tha t 56(d)(1) and (2 ) Although the adj us tm 56(d)(1) and (2 ) may affect the amount operating loss deduction allowed under sec . 56 allows the carryback of a net o purposes . . ( 4) and ( d) to the Code . sec . 701 ( a), 100 Stat . deduction for a net 6(d) defines the term ction" as the "net he taxable year unde r the amount of that are set forth in sec . nts set forth in sec . f the alternative tax net ec . 56(a)(4), nothing in erating loss for AMT - 20 - 172(b) does not refer to, or distinguish between, a net operating loss for regular tax23 purposes and a net operating loss for AMT purposes . See Plumb v . Commissioner , 97 T .C . 632, 638 (1991) . That section provides rules that apply to both the carryback of a net operating loss for regular tax purposes and the carryback of a net operating loss for AMT purposes . See id . at 638-639 . Like section 172(b), section 6501(h) does not refer to, or distinguish between, a net operating loss for regular tax pur- poses and a net operating loss for AMT purposes . If Congress had intended that section 6501(h) not apply with respect to the carryback of a net operating loss for AMT purposes, it would have so stated . It did not . We hold that the period of limitations in section 6501(h) applies with respect to the deficiency for each of petitioners' taxable years 1999 and 2000 that is attributable to the carryback to each of those years of the net operating loss for AMT purposes that they claimed in the 2001 amended return .2 4 23The term "regular tax" is defined in sec . . 55(c)(1) as the "regular tax liability for the taxable year (as defined in section 26(b))", reduced by certain credits specified in sec . 55(c)(1) . 24As discussed supra note 21, petitioners do not dispute that if sec . 6501(h) applies with respect to each of petitioners' taxable years 1999 and 2000, the period of limitations for the assessment of the deficiency that respondent determined for each of those years has not expired . - 21 - We have considered all of petitioners' contentions and arguments that are not discussed herein, and we find them to be without merit, irrelevant, and/or moot . To reflect the foregoing and the concessions of petitioners , Decision will be entered fo r respondent