Humes Houston Hart - Page 9

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          petitioner was an investor in securities and not a trader.  As              
          such, he was not conducting a trade or business.  See, e.g.,                
          Purvis v. Commissioner, supra at 1334 (taxpayer was merely an               
          investor where, among other things, his sales of stock were not             
          regular and continuous); Paoli v. Commissioner, T.C. Memo. 1991-            
          351 (taxpayer consummated 326 securities sales during the year at           
          issue involving approximately $9 million worth of stock or                  
          options; however, taxpayer was merely an investor where sales of            
          stocks were not sufficiently regular and continuous during the              
          entire year to constitute a trade or business).                             
          2.  Casualty or Theft Loss                                                  
               On October 19, 1987 (Black Monday), the Dow Jones Industrial           
          Average substantially declined.  Petitioner's Ferris & Co.                  
          account likewise declined in value.  Petitioner's broker at                 
          Ferris & Co. made a margin call on petitioner on October 20,                
          1987.  Petitioner was required to sell various stocks in his                
          Ferris & Co. account to meet his margin requirement.  Petitioner            
          argues that he is entitled to deduct the loss which he incurred             
          on the sale of this stock to satisfy his margin requirement as              
          either a casualty or theft loss.                                            
               Petitioner contends that he suffered a casualty loss in that           
          he suffered a sudden and catastrophic loss in the value of his              
          stock portfolio, which was realized the following day when he was           
          required to liquidate his trading account to meet his margin                
          requirement.  Petitioner contends that the events of October 1987           

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