Allen C. Chamberlin and Martha L. Chamberlin - Page 16

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               Creditors of The Chamberlin Corp. filed an involuntary                 
          petition in bankruptcy against the company on December 17, 1984.            
          However, The Chamberlin Corp. continued to operate and sought               
          outside investment in a quest to avoid involuntary bankruptcy               
          until at least March 1985.  Until the company accepted its                  
          involuntary bankruptcy fate in 1985, there was a reasonable                 
          possibility that the company could be saved and that petitioner             
          could recover some or all of his $450,000 loan to The Chamberlin            
          Corp.  See Morton v. Commissioner, supra at 1278.                           
                                 Personal Bankruptcy                                  
               Having decided the amount and timing of losses sustained by            
          petitioners and the amount of losses sustained by their                     
          bankruptcy estate, the next issue for decision is the effect that           
          petitioners’ personal chapter 11 bankruptcy had on these losses.            
               Upon the filing of a voluntary chapter 11 petition in                  
          bankruptcy, certain tax attributes listed in section 1398(g)                
          become property of the bankruptcy estate and are no longer tax              
          attributes of the taxpayer.  Section 1398(g) reads as follows:              
                    SEC. 1398(g) Estate Succeeds to Tax Attributes of                 
               Debtor.--The estate shall succeed to and take into                     
               account the following items (determined as of the first                
               day of the debtor’s taxable year in which the case                     
               commences) of the debtor--                                             
                         (1) Net operating loss carryovers.--The net                  
                    operating loss carryovers determined under section                

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