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Revenue Code in effect for the year in issue, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
Respondent determined a deficiency in petitioners’ 1995
Federal income tax of $7,277. The issue for decision is whether
petitioners are entitled to a claimed loss deduction of $35,000.1
Petitioners resided in Alexandria, Virginia, at the time
they filed the petition. The stipulation of facts and attached
exhibits are incorporated herein by this reference. We combine
the findings of fact and conclusions for convenience. All
references to petitioner are to Charles J. Portaluppi.
Petitioners formed CJP Systems, a sole proprietorship, in
1988. On March 8, 1989, petitioners incorporated CJP Systems and
organized it as a corporation under subchapter C for Federal
income tax purposes. Petitioners were the sole stockholders of
CJP Systems, Inc. CJP Systems and CJP Systems, Inc. primarily
provided roofing and general repair work as a prime or sub-
contractor for the U.S. Army Corps of Engineers at Fort Belvoir,
Virginia. CJP Systems, Inc. was dissolved in June 1991.
Petitioners assert the following as background to the
formation and operation of their business: They initially
contributed $25,000 of borrowed funds to the capital of CJP
1 Respondent also adjusted the taxable portion of Social
Security and railroad retirement benefits. This adjustment is
computational and dependent on the adjustment to income;
therefore, we need not address this adjustment.
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