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The facts in this case are different in all important
respects, and this Court has previously rejected an
interpretation of the Estate of Hall and Stevens cases that would
make the dealers through whom a taxpayer buys and sells
securities for his own account his "customers" for purposes of
section 1221(1). Frankel v. Commissioner, T.C. Memo. 1989-39.
In Frankel, the taxpayer's purchases and sales of various
government securities had all been made through primary dealers,
and this Court found unpersuasive the taxpayer's invocation of
Estate of Hall for the proposition that the dealers were his
customers. Estate of Hall, we concluded, was "distinguishable on
its facts" because the partnership therein was
"clearly shown by the evidence to have dealt in the
stocks involved primarily as a merchant. While it
purchased through brokers who were members of the stock
exchange and sold to brokers as principals or
customers, it held itself out as a merchant of
securities * * *. It also purchased from and sold to
others than brokers." * * *
Frankel v. Commissioner, supra (quoting Estate of Hall v.
Commissioner, supra at 1260); accord Swartz v. Commissioner, T.C.
Memo. 1987-582, affd. 876 F.2d 657 (8th Cir. 1989).
Likewise, petitioner's argument that the customers of his
broker-dealers should, under principles of agency, be treated as
his customers for section 1221(1) purposes has been considered
and rejected by this Court and the Court of Appeals for the
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