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commission. See Central Cuba Sugar Co. v. Commissioner, supra at
217-218 (holding that sales commission expenses were deductible
in the year the taxpayer entered the contract for sale even
though they were not payable until delivery, and even though the
commission expenses were subject to adjustment in accordance with
final weighing before shipment and forfeiture if the contract
were not carried out).
Petitioner argues that unlike full-commission securities
brokers who engage in a full range of activities, such as
research and portfolio management, the functions performed by
petitioner between the trade and settlement dates represent a
substantial percentage of the services provided by petitioner to
its brokerage customers. According to petitioner, the commission
income received by petitioner does not represent payment for
investment advice or other pretrade services, but rather is a fee
for the specific services of executing the transaction and
handling the mechanics of the transfer of title and delivery on
the settlement date. Therefore, petitioner argues, even if the
posttrade activities conducted by a full-commission broker are
considered ministerial, they cannot be considered ministerial
when performed by a discount broker such as petitioner.
While we appreciate the differences in the services provided
by full-commission and discount brokers, we cannot agree that
ministerial acts that constitute conditions subsequent to a
customer’s obligation to pay commissions are converted to
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