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anticipatory arrangements for the purchase or sale of a commodity
can be found in our opinion in Stoller v. Commissioner, T.C.
Memo. 1990-659, affd. in part and revd. in part 994 F.2d 855
(D.C. Cir. 1993).1 Following are pertinent terms and concepts.
A. Regulated Futures Contracts
A regulated futures contract (RFC) is a standardized executory
contract to buy or sell a designated commodity at a specific
price on a fixed date in accordance with the rules of a commodity
exchange. The date the contract is to be performed is normally
identified by its delivery month, e.g., “a January 1997
contract”. All RFCs start out as a contract between a buyer and
seller. At the end of each trading day, the exchange’s clearing
organization substitutes itself as the “other side” of each
contract, so the clearing organization becomes the buyer to each
seller and the seller to each buyer. The agreement made by or on
behalf of the two parties on the floor of the exchange is thus
broken down into a “long” RFC, in which one party is the buyer
and the clearing organization is the seller, and a “short” RFC,
1 My research has also led me to two helpful articles dealing
with both the mechanical and tax aspects of anticipatory
commodities transactions, at least as those matters stood in
1981, which is about the date of the transactions involved
herein. Donald Schapiro, Commodities, Forwards, Puts and Calls--
Things Equal to the Same Things Are Sometimes Not Equal to Each
Other, 34 Tax Lawyer 581 (1980-81); Donald Schapiro, Tax Aspects
of Commodity Futures Transactions, Forward Contracts and Puts and
Calls, 39th Annual N.Y.U. Institute 16-1 (1981).
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