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Other factors confirm that petitioner was not a dealer in
the years at issue. Besides customers, petitioner also lacked an
established place of business and licensing as a dealer. He did
not hold himself out as a dealer or otherwise advertise such
status.2 For nearly half of 1989 and all of 1990, petitioner was
a full-time employee elsewhere.
The tenuous nature of petitioner's claim of dealer status is
reflected by the inconsistencies in his position. He commenced
using the "on the book" method of bid and asked, his principal
grounds for claiming to be a dealer, sometime in 1988. Yet on
his 1988 return, he treated all losses from his securities
transactions--which were sizable, exceeding $96,000--as capital
losses, reporting them on a Schedule D. In 1989 and 1990, he
continued using the "on the book" method and treated the
substantial losses therefrom3 as ordinary losses in each year on
a Schedule C, claiming to be a securities dealer. During 1991,
petitioner continued using the method, but ceased buying and
2After first stipulating that he did not advertise as a
dealer, petitioner claimed at trial that his offers to buy and
sell, when they were the best price for a security and therefore
displayed on an exchange, constituted advertising.
3In 1989, petitioner claimed losses from transactions in
stock options and stocks of $106,503 and from futures contracts
of $117,852, for a total of $224,355 claimed on the Sched. C for
that year. (The losses from futures contracts are discussed
infra.) These losses resulted in an $80,067 loss carryforward,
which was claimed on Sched. C of the 1990 return, together with
1990 securities losses of $18,311, for a total of $98,378 of
Sched. C losses claimed in 1990.
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