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having been allowed when determining the availability of a loss
carryover to a subsequent year. See id.
The bankruptcy estate of petitioners did not file a tax
return for 1985 and, therefore, did not use any allowable losses
to offset taxable income in that year. During the later taxable
years of the bankruptcy estate, 1986 to 1994, the bankruptcy
estate filed tax returns but could not use any of the carryover
losses to reduce its income.
Petitioners have failed to produce the evidence necessary to
calculate the taxable income of the bankruptcy estate for 1985,
thus making it impossible to determine how much of the loss
belonging to the bankruptcy estate was absorbed. Because we
cannot determine whether any or all of the loss was absorbed by
the bankruptcy estate, we conclude that petitioners have failed
to prove that any amount thereof may be carried forward to the
years in issue. However, even if we were to assume that the
bankruptcy estate had no more income in 1985 than what the record
before us reflects, the taxable income of the bankruptcy estate
in 1985 would be more than enough to absorb completely $2,340,878
of deductible loss.
The bankruptcy trustee sold the personal residence of
petitioners on August 20, 1985. The amount realized from the
sale was equal to the $3,700,000 purchase price, and the adjusted
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