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On their Federal income tax returns, the Schroeders claimed the
following losses as their share of losses from SPC-FL:
Amount of Loss Claimed
Year Joseph T. Schroeder Sheryl S. Schroeder Total
1991 $16,628 $13,302 $29,930
1992 28,026 22,420 50,446
SPC-FL's corporate returns, Forms 1120S, did not reflect any
amount on Schedule L as "loans from shareholders" for taxable
years 1990, 1991, or 1992. The debt incurred by SPC-FL in
purchasing the assets from the SPC-FL shareholders (i.e., the
SPC-FL note) was reflected on Schedule L as "mortgages, notes,
and bonds payable in 1 year or more."18 SPC-FL's Schedules L,
for taxable years 1990, 1991, and 1992, reflected that its
capital stock was $1,000 and that its paid-in capital was $9,000.
18 The amounts reflected on SPC-FL's Schedules L as "mortgages,
notes, and bonds payable in 1 year or more" are as follows:
Year Beginning of Tax Year End of Tax Year
1990 Initial Return $1,047,927
1991 $1,047,927 1,053,592
1992 1,053,592 1,116,771
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