Robert G. Leslie and Marilyn B. Leslie - Page 23

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          a loss in the amount of $797,500.  Petitioner reported the loss             
          as a long-term capital loss.  Twenty-five short June 1982                   
          contracts were liquidated by assignment at a gain in the amount             
          of $1,062,125.  Petitioner treated the gain as a long-term                  
          capital gain.                                                               
               Petitioner liquidated his final positions with Hunter on               
          May 26, 1982.  This resulted in an offset loss of $2,814,700 from           
          the remaining long contracts and a gain from the assignment of              
          the remaining short contracts of $3,315,550.  The loss was                  
          treated by petitioner as a long-term capital loss, and the gain             
          was treated as a long-term capital gain.                                    
               Petitioners claimed on their 1982 joint Federal income tax             
          returns that the results of their 1982 Hunter trades were net               
          long-term capital gains from the assignment and offset of gold              
          futures contracts in the amount of $1,172,950.                              
          Losses on Straddle Transactions                                             
               The primary issue in this case is whether petitioners are              
          entitled to deduct losses on the Hunter straddle transactions as            
          claimed on their Federal income tax returns for the taxable years           
          1980, 1981, and 1982.  Resolution of the issue turns on the                 
          effect of section 108(a) of the Deficit Reduction Act of 1984               
          (DEFRA), Pub. L. 98-369, 98 Stat. 494, 630, as amended by section           
          1808(d) of the Tax Reform Act of 1986, Pub. L. 99-514, 100 Stat.            

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