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"impossible to contend that a stock speculator trading on his own
account is not subject to the [capital loss limitation]
provisions of section 117." H. Conf. Rept. 1385, 73d Cong., 2d
Sess. (1934), 1939-1 C.B. (Part 2) 627, 632.
Given its clearly stated purpose, this Court and others have
used the "to customers" requirement to distinguish between
securities "dealers" who are intended to come within the capital
asset exclusion of section 1221(1) and mere "traders" who are
not. As this Court explained in Kemon v. Commissioner, supra at
1032: "The theory of the [1934 Act] amendment was that those who
sell securities on an exchange have no 'customers' and for that
reason the property held by such taxpayers is not within the
* * * exclusionary clause [of the predecessor of section 1221]."
All of the securities transactions of petitioner for the
years in issue were undertaken on an exchange and effected
through broker-dealers. All such transactions were for
petitioner's own account. Lacking customers, petitioner cannot
qualify under section 1221(1) for ordinary loss treatment for his
securities transactions.
Petitioner argues that he satisfies the "to customers"
requirement either because the broker-dealers who handled his
orders were his customers, or because the customers of his
broker-dealers should, under principles of agency law, be treated
as his customers. For the proposition that his broker-dealers
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