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After concessions,1 the issues to be decided are as follows:
1. Whether petitioners are entitled to deduct for taxable
year 1990 the portion of a loss carryforward attributable to a
bad debt deduction claimed by petitioners on their amended 1989
tax return for the worthlessness of loans made by petitioner Stan
Pyron to a mining company; and
2. whether petitioners are entitled to a business bad debt
deduction for taxable year 1990 for the worthlessness of loans
made by petitioner to a mining company.
FINDINGS OF FACT
Some of the facts have been stipulated for trial pursuant to
Rule 91. The parties' stipulations of fact are incorporated
herein by reference and are found as facts in the instant case.
At the time they filed their petition in the instant case,
petitioners resided in Florence, Montana.
During 1979, petitioner Stan Pyron (petitioner) and Gerald
Dalton began investing in a Chilean copper mine of a mining
company called Compania Minera Esperanza (CME). During 1984 or
1 In the notice of deficiency, respondent disallowed, inter
alia, the bad debt deduction claimed by petitioners on their 1990
return for the worthlessness of loans in the amount of $47,938
made by petitioner Stan Pyron to Gerald Dalton, a business
associate. Respondent disallowed the deduction on the grounds
that the debt became worthless in taxable year 1988. At trial,
petitioners' counsel conceded that "1988 is the correct year for
whatever consequence flows from the Dalton activities." As 1988
is not a taxable year before us, we do not address the bad debt
deduction for the loans in the amount of $47,938 made by
petitioner to Mr. Dalton.
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