-17- "physical" copper took place through Manhattan Metals;11 and (8) all of the futures positions were closed out through "offset". In 1979 and 1980, Tandrill entered into futures transactions in gold, silver,12 copper, and Treasury bills through Bache. With respect to these transactions: (1) The gold and silver trading began on November 1, 1979, and the copper trading began on November 14, 1979; (2) all the gold, silver, and copper futures transactions 11 Tandrill's trading in "physical" copper had the following characteristics: (1) Delivery or receipt of the commodity was never intended and never took place; (2) all gains and losses were cleared through a "difference account"; (3) Manhattan Metals was on the other side of each transaction that Tandrill entered into; Manhattan Metals was the source of any profits and losses Tandrill realized; and (4) the "physical" copper trades did not occur on an exchange. Respondent could not determine how the “physical copper” transactions affected petitioners’ or Tandrill’s tax returns, and the tax consequences of these transactions are not in dispute here. 12 The price of silver fluctuated substantially on Nov. 21, 23, and 27, 1979. The following chart (taken from the COMEX Statistical Yearbook for 1979) indicates the price movement and number of contracts of September 1980 silver traded each day between Nov. 15 and 27, 1979: Price Contracts Date Movement Traded Nov. 15 down 7.8 605 Nov. 16 up 7 235 Nov. 19 up 2 126 Nov. 20 up 3 80 Nov. 21 down 21 4,463 Nov. 23 up 31.5 817 Nov. 26 up 7 173 Nov. 27 up 40 4,240 Of the 721 silver contracts that Tandrill closed out in 1979, 718 were closed out on either Nov. 21 or 27, 1979. On Nov. 21, 1979, Tandrill closed out 359 silver contracts by repurchasing 119 May 1980 silver contracts and 240 December 1980 silver contracts. On Nov. 27, 1979, Tandrill closed out 359 silver contracts by repurchasing 108 March 1981 silver contracts, 75 March 1980 silver contracts, and 176 September 1980 silver contracts.Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
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