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contracts reported in 1989. Petitioner claims that the losses
are ordinary because he entered into the futures contracts as a
hedge against the risks in his "inventory" of securities that he
held as a dealer. However, petitioner also entered into futures
contracts in 1988, when he did not claim to be a dealer, but did
not enter into such contracts in 1990, when he did claim dealer
status. Moreover, petitioner offered no evidence to indicate the
link between the risks in his securities "inventory" and their
offset in the futures contracts, other than his bald assertion
that the futures contracts were entered into as hedges.
In addition to its evidentiary shortcomings, petitioner's
hedging theory founders on the law as well. Futures contracts
are, generally speaking, capital assets. Petitioner's hedging
theory attempts to garner ordinary loss treatment for his futures
contract losses under the Corn Products doctrine.6 Arkansas Best
Corp. v. Commissioner, 485 U.S. 212 (1988), clarifies that the
Corn Products doctrine "[stands] for the narrow proposition that
'hedging' transactions that are an integral part of a business'
inventory-purchase system fall within [section 1221(1)]".
Arkansas Best Corp. v. Commissioner, supra at 212-213. Since we
have concluded that petitioner was not a dealer in the years in
issue, he did not have inventory within the meaning of section
6Corn Prods. Ref. Co. v. Commissioner, 350 U.S. 46 (1955).
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