-46-
time the transactions were initiated. However, all
circumstances surrounding the transactions are material
to the question of intent. 82 T.C. at 1022. [Ewing v.
Commissioner, supra at 417-418]
Petitioners contend that Tandrill’s primary purpose in entering
into the transactions at issue was to further its profit-making
objectives. Respondent, on the other hand, argues that Tandrill did
not enter into these transactions primarily for profit. Respondent
further contends that the most important factor determining profit
is the trading pattern involved. Each party relies on its expert’s
analysis of Tandrill’s trading.
Tandrill’s Trading Activities Were Not Profit Motivated
We have considered the qualifications and experience of the
parties’ experts and their particular knowledge and experience in
options and futures transactions, as well as the substance and
reasoning of their reports. We found respondent’s expert witness
reports and testimony more useful and persuasive than that of
petitioner’s. Messrs. Natenberg’s and Maduff’s reports support our
conclusion that tax considerations primarily motivated Tandrill’s
trading.37
37 Mr. Maduff concluded that Tandrill’s 1979 Treasury bill
trading established through Bache appears to have been taken with
a profit motive. We therefore assume that respondent concedes
that these trades were taken with a profit motive. Thus, the
following discussion does not address Tandrill’s 1979 Treasury
bill trading established through Bache.
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