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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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Last modified: May 25, 2011