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mortgages on the Greenwich residence. Petitioner also personally
guaranteed a loan of $300,000 from Ingersoll-Rand that was made
to his incorporated medical practice.
In 1983, petitioner purchased Bel-Mar Laboratories (Bel-
Mar), a company whose principal purpose was the manufacture of
parenteral products. Parenteral describes liquid medication
injected by syringe or needle directly into the bloodstream of a
patient. Petitioner became the sole shareholder and chairman of
the board of directors of Bel-Mar, and he immediately changed the
name to Chamberlin Parenteral, Inc. (Chamberlin Parenteral).
In 1984, The Chamberlin Corp. was unable to pay its debts,
and, on December 17, 1984, creditors filed an involuntary
chapter 11 bankruptcy petition against the company. Petitioner
continued to search for outside investments to save the company,
and the company continued to operate at least through March 1985.
The assets of The Chamberlin Corp., including the Largo facility
that had been surrendered to the corporation by petitioner, were
sold to pay debts of the company in June 1985.
On July 11, 1985, petitioners filed a personal chapter 11
petition in bankruptcy. Petitioners did not make a section
1398(d)(2) election to terminate their taxable year on
commencement of the bankruptcy. On the date of filing, debts of
petitioners totaled $6,319,354, while their assets totaled
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