ARMEN, Special Trial Judge: This case was heard pursuant to the provisions of section 7463 of the Internal Revenue Code in effect at the time that the petition was filed.¹ The decision to be entered is not reviewable by any other court, and this opinion should not be cited as authority.

Respondent determined deficiencies in petitioners' Federal income taxes for the taxable years 1999, 2000, and 2001 in the amounts of $ 3,961, $ 6,583, and $ 9,715 respectively.²

2003 Tax Ct. Summary LEXIS 163">*164 After concessions by the parties, the sole issue for decision is whether petitioners are entitled to investment interest expense deductions for the taxable years 1999, 2000, and 2001 in excess of the amounts allowed by respondent. We hold that they are not.

Background

Some of the facts have been stipulated, and they are so found. Petitioners resided in Lilburn, Georgia, at the time that their petition was filed with the Court.

Petitioners timely filed their Form 1040, U.S. Individual Income Tax Return, for the taxable year 1999. Petitioners attached to their return Schedule A, Itemized Deductions, and claimed an investment interest expense deduction of $ 31,215. Petitioners calculated this amount on an attached Form 4952, Investment Interest Expense Deduction, as shown below:

Part I. Total Investment Interest Expense

Line 1. Investment interest expense

   paid or accrued in 1999             $ 63,807

Line 2. Disallowed investment interest

   expense from 1998 Form 4952, line 7         ---

Line 3. Total investment interest expense        63,807

                       2003 Tax Ct. Summary LEXIS 163">*165     ======

Part II. Net Investment Income

Line 4a. Gross income from property held for

   investment (excluding any net gain from the

   disposition of property held for investment)    31,215

Line 4b. Net gain from the disposition

   of property held for investment      $  ---

Line 4c. Net capital gain from the

   disposition of property held for

   investment                 ---

Line 4d. Subtract line 4c from line 4b          ---

Line 4e. Enter all or part of the amount

   on line 4c that you elect to include

   in investment income                ---

Line 4f. Investment Income.

   Add lines 4a, 4d, and 4e.             31,215

Line 5. Investment expenses               ---

Line 6. Net investment income.

   Subtract line 5 from line 4f.           31,215

                           ======

Part III. Investment Interest Expense Deduction

Line 7. Disallowed investment interest

   expense to be carried forward to 2000.

2003 Tax Ct. Summary LEXIS 163">*166    Subtract line 6 from line 3.           32,592

Line 8. Investment interest expense deduction.

   Enter the smaller of line 3 or 6.         31,215

[6] Petitioners timely filed their Form 1040 for the taxable year 2000. Petitioners attached to their return Schedule A and claimed an investment interest expense deduction of $ 43,271. Petitioners calculated this amount on an attached Form 4952 as shown below:

Part I. Total Investment Interest Expense

Line 1. Investment interest expense

   paid or accrued in 2000               $ 92,036

Line 2. Disallowed investment interest

   expense from 1998 Form 4952, line 7          ¹---

                       2003 Tax Ct. Summary LEXIS 163">*167       _______

Line 3. Total investment interest expense        92,036

                             =======

Part II. Net Investment Income

Line 4a. Gross income from property held for

   investment (excluding any net gain from the

   disposition of property held for investment)      43,271

Line 4b. Net gain from the disposition

   of property held for investment     $   ---

Line 4c. Net capital gain from the

   disposition of property held for

   investment                ---

Line 4d. Subtract line 4c from line 4b            ---

Line 4e. Enter all or part of the amount

   on line 4c that you elect to include

   in investment income                   ---

Line 4f. Investment Income.

   Add lines 4a, 4d, and 4e.               43,271

Line 5. Investment expenses                 ---

Line 6. Net investment income.

   Subtract line 5 from line 4f.             43,271

    2003 Tax Ct. Summary LEXIS 163">*168                          =======

Part III. Investment Interest Expense Deduction

Line 7. Disallowed investment interest

   expense to be carried forward to 2001.

   Subtract line 6 from line 3.              48,765

Line 8. Investment interest expense deduction.

   Enter the smaller of line 3 or 6.           43,271

FOOTNOTE TO TABLE

n1Petitioners did not carry forward the disallowed investment interest expense of $ 32,592 from 1999.

END OF FOOTNOTE TO TABLE

Petitioners timely filed their Form 1040 for the taxable year 2001. Petitioners attached to their return Schedule A and claimed an investment interest expense deduction of $ 42,039. Petitioners calculated this amount on an attached Form 4952 as shown below:

Part I. Total Investment Interest Expense

Line 1. Investment interest expense

   paid or accrued in 2001                $ 2,779

Line 2. Disallowed investment interest

   expense from 2000 Form 4952, line 7          48,765

Line 3. Total investment interest expense        51,544

      2003 Tax Ct. Summary LEXIS 163">*169                        ======

Part II. Net Investment Income

Line 4a. Gross income from property held for

   investment (excluding any net gain from the

   disposition of property held for investment)      42,039

Line 4b. Net gain from the disposition

   of property held for investment     $   ---

Line 4c. Net capital gain from the

   disposition of property held for

   investment                 ---

Line 4d. Subtract line 4c from line 4b            ---

Line 4e. Enter the amount from line 4c

   that you elect to include in investment income      ---

Line 4f. Investment Income.

   Add lines 4a, 4d, and 4e.               42,039

Line 5. Investment expenses                  ---

Line 6. Net Net investment income.

   Subtract line 5 from line 4f.             42,039

Part III. Investment Interest Expense Deduction

Line 7. Disallowed investment interest

   expense to be carried forward to 2002.

   Subtract line 6 from line 3.  2003 Tax Ct. Summary LEXIS 163">*170             9,505

Line 8. Investment interest expense deduction.

   Enter the smaller of line 3 or 6.           42,039

[8] Petitioners attached a Schedule D, Capital Gains and Losses, to their tax return for each taxable year at issue. Petitioners reported total net capital losses for each taxable year as follows:

                1999      2000       2001

                ____      ____       ____

Net short-term capital

 gain or (loss)¹       ($  27,672)  ($  1,781,652)  ($  2,109,359)

Net long-term capital

 gain or (loss)²        (9,825)     (2,609)    (107,733)

2003 Tax Ct. Summary LEXIS 163">*171               ___________  ____________  _____________

Total net capital loss³     (37,497)   (1,784,261)   (2,217,092)

FOOTNOTES TO TABLE

n1The net short-term capital loss for each taxable year included short-term carryover losses to 1999, 2000, and 2001 of $ 111,114, $ 27,672, and $ 1,781,652, respectively.

n2The net long-term capital loss for each taxable year included long-term carryover losses to 1999, 2000, and 2001 of $ 21,391, $ 9,825, and $ 2,609, respectively.

n3For each taxable year, petitioners deducted the maximum of $ 3,000 of their overall capital losses against ordinary income on their Form 1040, Line 13 (Capital gain or (loss)). See sec. 1211(b).

END OF FOOTNOTES TO TABLE

In the notice of deficiency, respondent disallowed a portion of petitioners' investment interest expense deductions2003 Tax Ct. Summary LEXIS 163">*172 for 1999, 2000, and 2001 in the amounts of $ 26,076, $ 38,784, and $ 49,483, respectively.³ Respondent contends that petitioners' "gross income from property held for investment" for 1999, 2000, and 2001 was $ 5,139, $ 4,487, and $ 453, respectively.⁴ Respondent also argues that because petitioners had a total net capital loss in each of the taxable years at issue, petitioners had zero "net gain from the disposition of property held for investment" for purposes of determining their "net investment income" for each taxable year.⁵

Petitioners contend that for purposes of determining the "net investment2003 Tax Ct. Summary LEXIS 163">*173 income" for each taxable year, "net gain from the disposition of property held for investment" includes only their items of capital gain. 6 Specifically, petitioners argue that their capital losses and capital loss carryovers are not included in the calculation of "net gain from the disposition of property held for investment".

Discussion⁷

The parties do not dispute petitioners' entitlement to an investment interest expense deduction under section 163(a), but the parties do dispute the calculation of that deduction. The main issue of contention between the parties is whether the term "investment income", as defined by section 163(d)(4)(B), includes petitioners' capital losses and capital loss carryovers for purposes of calculating the limitation on the investment interest expense deduction.

In resolving this issue, we rely on section 163(d) and its2003 Tax Ct. Summary LEXIS 163">*174 underlying framework and legislative history.

The starting point for the interpretation of a statute is the language itself. Consumer Prod. Safety Comm. v. GTE Sylvania, Inc., 447 U.S. 102">447 U.S. 102, 447 U.S. 102">108 (1980); see also United States v. Bryant, 671 F.2d 450">671 F.2d 450, 671 F.2d 450">453 (11th Cir. 1982); Warbelow's Air Ventures, Inc. v. Commissioner, 118 T.C. 579">118 T.C. 579, 118 T.C. 579">583 (2002). We interpret the statute with reference to the legislative history primarily to learn the purpose of the statute and to resolve any ambiguity in the words contained in the text. Allen v. Commissioner, 118 T.C. 1">118 T.C. 1, 118 T.C. 1">7 (2002) (and cases cited therein); see also City of New York v. Commissioner, 103 T.C. 481">103 T.C. 481, 103 T.C. 481">489 (1994), affd. 70 F.3d 142">70 F.3d 142 (D. C. Cir. 1995). Moreover, even where the statutory language appears clear, we may seek out any reliable evidence as to legislative purpose. 103 T.C. 481">City of New York v. Commissioner, supra.

1. Section 163

As a general rule, section 163(a) allows a deduction for all interest paid or accrued within the taxable year on indebtedness. In the case of an individual, however, section 163(d) limits the amount of2003 Tax Ct. Summary LEXIS 163">*175 the investment interest expense deduction to the taxpayer's net investment income for the taxable year.⁸ In other words, the higher the taxpayer's net investment income, the more investment interest expense the taxpayer is allowed to deduct for the taxable year. Furthermore, section 163(d)(2) allows the taxpayer to carryforward any investment interest expense disallowed under the general limitation for the taxable year and deduct it as investment interest expense paid or accrued in the succeeding taxable year to the extent that the taxpayer has net investment income in that year.

Section 163(d)(4)(A) defines net investment income as the excess of investment income over investment expense. Section 163(d)(4)(B),⁹ in turn, defines investment income as follows:

2003 Tax Ct. Summary LEXIS 163">*176      (B) Investment Income. -- The term "investment

   income" means the sum of --

        (i) gross income from property held for investment

     (other than any gain taken into account under clause

     (ii)(I)),

        (ii) the excess (if any) of --

          (I) the net gain attributable to the disposition

        of property held for investment, over

          (II) the net capital gain determined by only

        taking into account gains and losses from dispositions

        of property held for investment, plus

        (iii) so much of the net capital gain referred to in

     clause (ii)(II) (or, if lesser, the net gain referred to in

     clause (ii)(I)) as the taxpayer elects to take into account

     under this clause. [Emphasis added.]

At issue in the instant case is the calculation of section 163(d)(4)(B)(ii)(I). To that end, the meaning of the term "net gain" is integral to our analysis.

2. Net Gain

Neither section 163, the regulations, the2003 Tax Ct. Summary LEXIS 163">*177 case law, nor the statute's legislative history defines the term "net gain". If a term is used in the Internal Revenue Code (I. R. C.) without definition and the legislative history fails to provide any insight or guidance as to the appropriate definition, we use the ordinary and common usage of the term in applying that provision. Texaco Inc. & Subs. v. Commissioner, 101 T.C. 571">101 T.C. 571, 101 T.C. 571">575 (1993), affd. 98 F.3d 825">98 F.3d 825 (5th Cir. 1996); see Commissioner v. Brown, 380 U.S. 563">380 U.S. 563, 380 U.S. 563">570-571 (1965); Crane v. Commissioner, 331 U.S. 1">331 U.S. 1, 331 U.S. 1">6-7 (1947); Rome I, Ltd. v. Commissioner, 96 T.C. 697">96 T.C. 697, 96 T.C. 697">704 (1991); Union Pac. Corp. v. Commissioner, 91 T.C. 32">91 T.C. 32, 91 T.C. 32">38-40 (1988); First Sav. & Loan Association v. Commissioner, 40 T.C. 474">40 T.C. 474, 40 T.C. 474">482 (1963). We look, therefore, to the ordinary and common usage of the term "net gain" in applying the statute.

Neither Black's Law Dictionary, 957 (7th ed. 1999) nor Webster's Third New International Dictionary (1993) specifically defines the term "net gain". However, the ordinary and common usage of the term "net gain" connotes the pecuniary gain remaining after offsetting gains against losses. 2003 Tax Ct. Summary LEXIS 163">*178 Presumably, a prerequisite to the existence of net gain is that the taxpayer's gains exceed the taxpayer's losses.

Black's Law Dictionary (7th ed. 1999) defines the term "net loss" as "The excess of all expenses and losses over all revenues and gains." By analogy, the natural, ordinary, and familiar meaning of the term "net gain" is the excess of all gains over all losses.¹⁰

As is relevant herein, the terms "gains" and "losses" include short-term and long-term capital gains and short-term and long-term capital losses, 2003 Tax Ct. Summary LEXIS 163">*179 respectively. For purposes of determining "net short-term capital gain", the prior year's short-term capital loss that is carried forward to the current taxable year under section 1212(b)(1)(A) is treated as a short-term capital loss for such taxable year.¹¹Sec. 1.1222-1(b)(1), Income Tax Regs. Likewise, for purposes of determining "net long- term capital gain", the prior year's long-term capital loss that is carried forward to the current taxable year under section 1212(b)(1)(B) is treated as a long-term capital loss for such taxable year. Sec. 1.1222-1(b)(2), Income Tax Regs. Furthermore, the pertinent parts of the regulations provide:

2003 Tax Ct. Summary LEXIS 163">*180    the portion thereof which is a short-term capital loss carryover

   shall be carried over to the succeeding taxable year and

   treated as a short-term capital loss sustained in such

   succeeding taxable year, and the portion thereof which

   constitutes a long-term capital loss carryover shall be carried

   over to the succeeding taxable year and treated as a long-

   term capital loss sustained in such succeeding taxable

   year. The carryovers are included in the succeeding taxable

   year in the determination of the amount of the short-term

   capital loss, the net short-term capital gain or loss, the long-

   term capital loss, and the net long-term capital gain or loss in

   such year, the net capital loss in such year, and the capital

   loss carryovers from such year. * * * [Sec. 1.1212-1(b)(1),

   Income Tax Regs.; emphasis added.]

It follows that because short-term capital loss carryovers and long-term capital loss carryovers are treated as losses in the current taxable year, they are also losses for purposes of determining "net gain" in section 163(d)(4)(B)(ii)(I).

Accordingly, we conclude2003 Tax Ct. Summary LEXIS 163">*181 as a matter of law that the term "net gain" for purposes of section 163(d)(4)(B)(ii)(I) means the excess, if any, of total gains over total losses, including capital loss carryovers, from the disposition of property held for investment.¹²

Section 163(d) was enacted to curb the practice of using the investment interest expense deduction to offset taxable income (e.g., noninvestment income) in a current taxable year; i.e., to prevent the "mismatching" of investment income and investment expenses.¹³

2003 Tax Ct. Summary LEXIS 163">*182 As relevant to this case, the Tax Reform Act of 1969 (TRA 1969), Pub. L. 91-172, sec. 221(a), 83 Stat. 574, initially limited the deduction for investment interest expense to $ 25,000, plus the amount of net investment income, plus the amount of long-term capital gain. Again as relevant to this case, the TRA 1969 amendment defined investment income as (i) the gross income from interest and dividends, (ii) the net short-term capital gain attributable to the disposition of property held for investment, and (iii) any amount treated under sections 1245 and 1250 as ordinary income. See sec. 163(d)(3)(B), I.R.C. 1954, as amended by TRA 1969.

In 1976, Congress revised section 163(d) to reduce the use of this deduction to shelter noninvestment types of income.¹⁴ See sec. 209(a) of the Tax Reform Act of 1976 (TRA 1976), Pub. L. 94-455, 90 Stat. 1542. The definition of investment income remained unchanged, but the TRA 1976 amendment eliminated any offset of investment interest expense against long-term capital gain. Id.

2003 Tax Ct. Summary LEXIS 163">*183 In 1986, Congress expanded the scope of the investment interest expense limitation and altered the calculation of the limitation by including "any net gain attributable to the disposition of property held for investment". Tax Reform Act of 1986 (TRA 1986), Pub. L. 99-514, sec. 511(a), 100 Stat. 2320; see H. Conf. Rept. 99-841 (1986), 1986-3 C.B. (Vol. 4) 152, wherein the conference committee articulated the intent to expand the definition of investment income "to include the same items as under * * * [TRA 1976] plus the taxable portion of net gain from the disposition of investment property."¹⁵ (Emphasis added.)

Petitioners contend that respondent mischaracterized their investment income for each taxable year at issue by including capital losses and capital loss carryovers. Petitioners argue that section 163(d)(4)(B)(ii)(I) requires inclusion of only their capital gains and, furthermore, that "net gain" does not require inclusion of their capital losses and capital loss carryovers.

Petitioners' reading of the statute is at odds with the plain language of the statute. Essentially, petitioners attempt to omit the word "net" from the definition of investment income, even though the phrase is clearly found in section 163(d)(4)(B)(ii)(I). If we were to adopt petitioners' reading of the statute, we would render meaningless Congress's explicit reference in section 163(d)(4)(B)(ii) to the term "net gain". (Emphasis added.) Clearly, Congress did not intend this result, nor do we adopt it.

We hold as a matter of law that petitioners' capital losses and capital loss carryovers are an integral part of the equation in calculating investment income under section 163(d)(4)(B). Were these losses not included, petitioners would receive a double tax benefit. Under petitioners' approach, capital2003 Tax Ct. Summary LEXIS 163">*185 gains would be offset by capital losses and capital loss carryovers and not subjected to taxation. Then, those same capital gains that escaped taxation would be used to increase investment income and, simultaneously, the investment interest expense deduction. This double tax benefit is clearly not permitted by section 163(d).

We now turn to petitioner's investment interest expense deductions for the taxable years at issue. Based on the amounts reported by petitioners on their Schedules D, petitioners had a total net capital loss in each taxable year at issue. It follows, then, that petitioners had zero "net gain" in 1999, 2000, and 2001 for purposes of section 163(d)(4)(B)(ii)(I). Therefore, petitioners have net investment income and allowable investment interest expense deductions for the taxable years at issue as follows:

                     1999     2000     2001

                     ____     ____     ____

Investment interest expense       $ 63,807   $ 92,036   $ 2,779

Disallowed investment interest

 expense from prior taxable year     --- 2003 Tax Ct. Summary LEXIS 163">*186     58,668   146,217

                    _______    _______   _______

Total investment interest expense     63,807    150,704   148,996

Gross income from property held

 for investment              5,139     4,487     453

Net gain from the disposition of

 property held for investment       ---      ---     ---

                    _______    ________   _______

Net investment income           5,139     4,487     453

Disallowed investment interest

 expense to be carried forward to

 the next taxable year          58,668    146,217   148,543

Investment interest expense deduction   5,139     4,487     453

D. Conclusion

We hold that "net gain", as that term is used in section 163(d)(4)(B)(ii)(I), requires inclusion of petitioners' capital losses and capital loss carryovers for purposes of calculating the section 163(d)(1) limitation on the investment interest expense deduction. We hold further that petitioners' investment interest expense deductions2003 Tax Ct. Summary LEXIS 163">*187 for 1999, 2000, and 2001 are limited to $ 5,139, $ 4,487, and $ 453, respectively. In view of the foregoing, we sustain respondent's determination on the disputed issue.

We have considered all of the other arguments made by petitioners and, to the extent that we have not specifically addressed them, we find them to be without merit.

Reviewed and adopted as the report of the Small Tax Case Division.

To reflect the foregoing,

Decision will be entered under Rule 155.