-21-
for a management fee and accounting fee of $22,500 and $270,
respectively. These ordinary losses arose from purchased put
options on Treasury bills. Each of Tandrill's purchased put
options was closed out at a loss in 1979.
Tandrill also reported short-term capital gains of $163,666 on
this return, computed as the excess of short-term gains of
$1,736,366 over short-term losses of $1,572,700. The $1,736,366 in
short-term capital gains arose from the sale of put options on
Treasury bills. The $1,572,700 in short-term capital losses arose
from futures transactions in gold, silver, copper, and Treasury
bills.
b. 1980
On its 1980 partnership return, Tandrill reported an ordinary
loss of $19,428 on Treasury bill futures transactions, interest
income of $36,065, and deductions for a management fee and
accounting fee of $43,750 and $9,700, respectively. Tandrill also
reported short-term capital losses of $918,244 and long-term
capital gains of $1,509,077. Both the short-term capital losses
and long-term capital gains arose from commodity futures
transactions.
Petitioners' 1979 and 1980 Federal Income Tax Returns
Peat Marwick’s Miami office prepared petitioners’ returns for
both years in issue. Petitioner provided Peat Marwick with his tax
information and copies of his 1979 and 1980 Schedules K-1 from
Tandrill for use in Peat Marwick’s preparation of petitioners’ 1979
and 1980 returns.
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