Estate of Leon Israel, Jr., Deceased, Barry W. Gray, Executor, and Audrey H. Israel - Page 5

            Transaction & Losses                                                                      
            Claimed                      Appendixes A-1 and A-2 Line Nos.                             
            First Contracts  -- ($837,500)      A-1, Lines 5, 7, 9, 11, 17-24, 26, 28                 
            Second Contracts -- ($816,219)      A-2, Lines 1, 3, 5, 7-12, 24-26, 29, 30               
            Third Contracts  -- ( $10,000)      A-2, Lines 13-20                                      

                  The opinion of the U.S. Court of Appeals for the District of                        
            Columbia Circuit in Stoller v. Commissioner, supra, provides only                         
            an abbreviated explanation of the particular forward contracts                            
            that were the subject of the appeal of our opinion in Stoller v.                          
            Commissioner, supra, and that are at issue herein.                                        
                  We also, in light of the essentially legal nature of the                            
            issue before us, set forth herein a somewhat abbreviated                                  
            explanation of the details of the particular forward contracts                            
            that are at issue, but we emphasize particular aspects of these                           
            forward contracts, the significance of which appears to have been                         
            overlooked by the Court of Appeals in its analysis and opinion in                         
            Stoller v. Commissioner, supra.                                                           
                  We believe that the aspects of these transactions that we                           
            emphasize herein are significant and determinative of the narrow                          
            issue before us (namely, whether the losses in question are                               
            deductible as capital or as ordinary losses).  We also note that                          
            respondent has conceded the increased interest under section                              
            6621(c) and makes no contention herein that the forward contracts                         
            at issue were sham transactions or lacked a business purpose or                           
            profit motive.  Further, no issue is raised as to petitioners’                            
            cost basis in the forward contracts in question.                                          

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