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In the determination of whether a person is a dealer in stocks or
securities, "such person's transactions in stocks or securities
effected both in and outside the United States shall be taken
into account." Id. The term "securities" for purposes of
paragraph (c) of section 1.864-2, Income Tax Regs., means "any
note, bond, debenture, or other evidence of indebtedness, or any
evidence of an interest in or right to subscribe to or purchase
any of the foregoing." Sec. 1.864-2(c)(2)(i), Income Tax Regs.
Although the general rule is that a dealer in stocks or
securities is ineligible for the exclusion of trading for the
taxpayer's own account, certain types of dealers are excepted
from that general rule by section 1.864-2(c)(2)(iv)(b), Income
Tax Regs., which provides that
A foreign person who otherwise may be considered a
dealer in stocks or securities under (a) of this
subdivision shall not be considered a dealer in stocks
or securities for purposes of this subparagraph--
* * * * * * *
(2) Solely because of transactions effected in the
United States in stocks or securities pursuant to his grant
of discretionary authority to make decisions in effecting
those transactions, if he can demonstrate to the
satisfaction of the Commissioner that the broker, commission
agent, custodian, or other agent through whom the
transactions were effected acted pursuant to his written
representation that the funds in respect of which such
discretion was granted were the funds of a customer who is
neither a dealer in stocks or securities, * * * or a foreign
corporation described in subdivision (iii)(b) of this
subparagraph. * * *
For purposes of the foregoing exception (for certain dealers), a
foreign person includes, inter alia, a nonresident alien
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