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his generalized testimony. Therefore, petitioners’ allowable
losses from their contributions or reloans of the Freedom Federal
loan proceeds to The Chamberlin Corp. or Chamberlin Parenteral
are no more than $450,000.
The next argument of petitioners, which respondent does not
contest, is that petitioners’ bankruptcy estate is entitled to a
loss of $944,049 for its partial repayment of loans made by
Ingersoll-Rand to The Chamberlin Corp. The loans, which totaled
$2,900,000, were repaid to the extent of $944,049 by the
bankruptcy estate of petitioners. A guarantor, such as
petitioner, who pays part of a loan for a corporation in
bankruptcy is deemed to have made a loan to the corporation for
the amount paid to the creditor. The loan, deemed made to the
corporation, is deductible as a worthless debt. See sec. 1.166-
9, Income Tax Regs.
Timing of Losses of Petitioners
Petitioners argue that their $1,255,400 loss arising from
Pharmacare should be recognizable in 1985, the year that the
assets of The Chamberlin Corp. were sold in bankruptcy. This
argument hinges upon a finding that The Chamberlin Corp. and
Pharmacare should be regarded as the same entity. However,
Pharmacare terminated and ceased to exist after the closing of
its chapter 7 bankruptcy estate. The Chamberlin Corp. was a
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