Allen C. Chamberlin and Martha L. Chamberlin - Page 19

                                       - 19 -                                         

          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           

Page:  Previous  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  Next

Last modified: May 25, 2011