David Rothner and Nancy J. Rothner - Page 13

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          proceedings.  Moreover, had petitioner failed to pay the fine, he           
          would have been denied access to the floor of the CME and thus              
          rendered unable to carry on his floor brokerage business.                   
          Additionally, his seat on the exchange could have been sold.  By            
          paying the fine, petitioner was able to resume his business                 
          activities without further disruption.  Based on the foregoing,             
          we hold that petitioner's payment of the CME fine was an ordinary           
          and necessary expense and is therefore properly deductible                  
          pursuant to section 162(a).                                                 
               Because we have decided that the payment of the fine is an             
          allowable deduction pursuant to section 162(a), we need not                 
          consider petitioner's alternative contention that the fine is               
          deductible as a business loss pursuant to section 165(a) and (c).           
          To reflect the foregoing and concessions,                                   

                                                  Decision will be entered            
                                             under Rule 155.                          


















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