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constituted an ordinary, and not a capital, loss because of his
hedging activities and his apparent belief that he had introduced
sufficient evidence to establish that he held the options that
generated the 1986 net trading loss for the purposes specified in
section 1256(f)(3)(B).
Ms. Gordon further contends that even if Mr. Gordon had
claimed that he held most of the options that generated the 1986
net trading loss to hedge the risks that were associated with
other property that he owned, Mr. Gordon was not a "dealer in
securities".7 Thus, according to Ms. Gordon, "as a matter of
law" under general income tax rules, any loss with respect to any
such hedged property would not have been an ordinary loss in Mr.
Gordon's hands, and, consequently, regardless of the nature of
his hedging activities, Mr. Gordon could not have fit within the
hedging exception in section 1256(f)(3)(B). In support of her
position, Ms. Gordon points to the following testimony elicited
by respondent's counsel on respondent's cross-examination of Mr.
Gordon:
Q During the tax year 1986, while you were on
the floor of the American Stock Exchange, * * * were
7 Although Ms. Gordon does not provide an explanation in her
motion as to what she means by a "dealer in securities", we
assume that she is referring to an individual who holds securi-
ties, other than the type of options that were held by Mr. Gordon
during 1986, that are excluded from the definition of a capital
asset under sec. 1221(1). Our use herein of the phrase "dealer
in securities" shall have the same meaning as we assume Ms.
Gordon intended by the use of that phrase.
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