-56-
Illingworth was involved with other partnerships that realized tax
losses in all years for which their results are in evidence. The
partnerships had similar trading patterns to Tandrill. This is
another indication that Mr. Illingworth’s “expertise” as a trader
lay in his ability to produce tax losses for his partners.
Conclusion
We conclude that Tandrill did not enter into the options and
futures transactions with a primary profit motive. Thus, respondent
properly disallowed petitioners’ allocable share of Tandrill’s 1979
and 1980 losses under section 165(c)(2).
Issue 2. Section 6653(a) Additions to Tax
The second issue is whether petitioners are liable for
additions to tax for negligence or intentional disregard of rules
or regulations for 1976 and 1980. For these years, respondent has
the burden of proving petitioners’ negligence or disregard of rules
and regulations because it is a new matter raised in respondent’s
amended answer. Rule 142(a).
45(...continued)
activities is unclear. As president of Manhattan Metals, he had
ultimate responsibility for Tandrill’s trading. However, the
extent to which Mr. Illingworth personally determined which
trades Tandrill should make, what trading strategies Tandrill
should adopt, or the degree of his oversight is uncertain. For
example, he apparently delegated all responsibility for the
options trading to Messrs. Willensky and Sherman of Wilcap
Advisors, and for the futures trading to Mr. Weiss, a Manhattan
Metals employee. And Mr. Illingworth testified that Mr. Weiss
did not discuss his trades with Mr. Illingworth.
Page: Previous 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 NextLast modified: May 25, 2011