Alan M. Resser and Melinda B. Resser - Page 11

                                       - 11 -                                         
          return); (3) his work as a consultant (earning $40,775); and (4)            
          his account RSR/QRF activity, described as "Investments" on                 
          Schedule C of petitioners' return.  We found that Mr. Resser's              
          account QRF trading activity was separate and distinct from his             
          account AMR trading for Bichon and his other trading-related                
          activities.  We thus evaluated his account QRF activity                     
          separately and held that Mr. Resser's personal trading activity             
          in account QRF was not conducted with the regularity or                     
          continuity necessary to consider the activity a trade or                    
          business.  Our holding was based on the fact that no trading                
          occurred in account QRF from the beginning of March 1982 until              
          September 30, 1982.  For the balance of the year, Mr. Resser                
          traded TDY in account QRF on only 6 days, establishing only nine            
          spreads.  Additionally, Mr. Resser failed to establish whether              
          his TDY trading consumed only a few minutes during the year or a            
          significant portion of several days.  We concluded that Mr.                 
          Resser's insubstantial and infrequent trading in TDY stock                  
          options did not constitute a trade or business and that                     
          petitioners were not entitled to deduct Mr. Resser's account QRF            
          losses under section 165(c)(1).                                             
               With respect to section 165(c)(2), we stated that the Court            
          has consistently held that, in order to deduct a loss under                 
          section 165(c)(2), the taxpayer must show that profit was the               
          primary motivation for entering the transaction.  We then                   






Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011