T.C. Memo. 2004-132
UNITED STATES TAX COURT
FRANK CHEN, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 1271-03. Filed June 1, 2004.
During 1999, P incurred a net loss of $84,794 in
connection with 323 transactions involving the purchase
or sale of securities, most of which P held for less
than 1 month. Approximately 94 percent (303) of those
transactions occurred during February, March, and April
1999, with no transactions occurring in 6 of the other
9 months. Attached to P’s petition was a purported
retroactive election under sec. 475(f)(1), I.R.C., of
mark-to-market accounting, available to “traders in
securities”, to be effective as of Jan. 1, 1999. P
claims that, pursuant to that election, he is entitled
to treat the loss arising out of his 1999 trading
activities as a fully deductible, ordinary loss
incurred in a trade or business under sec. 165(c)(1),
I.R.C.
1. Held: During 1999, P was not a “trader in
securities” eligible to make a mark-to-market election
under sec. 475(f)(1), I.R.C.
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