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$101,938.26 in 1989 and losses of $54,529.65 in 1990.
Petitioner treated the losses as ordinary and deducted
them on a Schedule C, Profit or Loss from Business,
filed with his return for each year. Each Schedule C
identifies petitioner's business as "Commodity Trading
Advisor/Publishing." The gross receipts reported on each
Schedule C consist entirely of the receipts from the sale
of petitioner's manuscript for his commodity trading
system. Petitioner labeled the deductions as "Research and
Experimentation to Improve Trading System Formula For
Sale."
Respondent disallowed the deductions on the ground
that petitioner had not established that the amounts were
ordinary and necessary business expenses. Respondent
determined that "the commodities futures transactions
constitute capital assets and are includible as capital
gains and losses on Schedule D." Respondent allowed
petitioner to deduct the losses under section 165(a) but
treated them as losses from sales or exchanges of capital
assets which are allowable only to the extent allowed in
sections 1211(b) and 1212. Accordingly, the principal
issue for decision in this case is whether the losses
realized by petitioner from his trading of commodity
futures are losses from sales or exchanges of capital
assets. In passing, we note that petitioner does not claim
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