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In January 1982 petitioner and Hunter continued to reduce
the condor position. This was made necessary by the fact that
all the remaining gold contract positions consisted of 1982
contracts and would have to be settled by delivery if held much
longer. As a result of the impending delivery dates, petitioner
liquidated 30 of the remaining long August positions on Janu-
ary 26, 1982. The repositioning resulted in an offset loss of
$1,007,100, which petitioner treated as a long-term capital loss.
Also on January 26, 1982, an equivalent short position
consisting of 30 contracts of February 1982 gold was liquidated,
but, instead of being offset by a direct purchase on the trading
floor of COMEX, the short position was "assigned". This assign-
ment resulted in a profit of $1,149,450, which petitioners
reported as a long-term capital gain on their 1982 Federal income
tax return.
The liquidation continued on February 24, 1982, when 25 long
March contracts were sold, and 25 short June contracts were
assigned. Petitioner recognized an $802,500 loss from the offset
of the March position, which he treated as a long-term capital
loss. Simultaneously, petitioner recognized a $1,067,625 profit
from the assigned short June position, which petitioner treated
as a long-term capital gain.
On February 25, 1982, an additional 25 contracts on each
side of the remaining spread position in the account were
liquidated. Twenty-five long March 1982 contracts were offset at
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