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section 1256(f)(3)(A), his 1986 net trading loss is a loss from
the sale or exchange of a capital asset, that loss nonetheless is
an ordinary loss pursuant to section 1256(f)(3)(B)13 because he
"hedged more than 80% of * * * [his] transactions". To support
that contention, Mr. Gordon relies on his general, vague, and
conclusory testimony that he used certain options to hedge the
risks that were associated with certain other options and that he
used common stock to hedge the risks that were associated with
certain options.14 We are unable to find from that testimony
that Mr. Gordon held the options that generated his 1986 net
trading loss for the purposes specified in section 1256(f)(3)(B)
or that he otherwise fits within that statutory exception to the
rule mandated by section 1256(f)(3)(A). Mr. Gordon has not
presented any evidence showing (1) what specific options were
held by him during 1986 for hedging purposes and what specific
properties were being hedged by those options; (2) the nature of
his hedging transactions (e.g., what specific risks were associ-
ated with the properties that he claims were being hedged and how
13 As noted above, sec. 1256(f)(3)(B) provides an exception to
the capital gain or loss treatment required by sec. 1256(f)(3)(A)
in the case of "any section 1256 contract to the extent such
contract is held for purposes of hedging property if any loss
with respect to such property in the hands of the taxpayer would
be ordinary loss."
14 Mr. Gordon does not contend and did not testify that he used
any of the options in question to hedge the risks that were
associated with any of the common stock that he may have owned.
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