Alan M. Resser and Melinda B. Resser - Page 12

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          articulated petitioners' burden as one of proving that Mr. Resser           
          executed the TDY stock option spread transactions "primarily for            
          the purpose of obtaining an economic profit independent of tax              
          savings".  Resser v. Commissioner, T.C. Memo. 1991-423.                     
               Despite Mr. Resser's testimony to the contrary, we held that           
          Mr. Resser did not prove that he entered into the TDY                       
          transactions at issue primarily for profit:                                 
                    We are unpersuaded that * * * [Mr. Resser's]                      
               primary purpose for engaging in stock option spreads                   
               was to make a profit.  In January 1982, * * * [Mr.                     
               Resser] failed to transact any stock option trades in                  
               the RSR account.  In February, * * * [Mr. Resser]                      
               closed out one box spread that he had opened in 1981.                  
               From March until the end of September, * * * [Mr.                      
               Resser] did not enter into any stock option trades in                  
               the newly named QRF account.  In a 2-week period, from                 
               September 30 to October 14, * * * [Mr. Resser]                         
               generated losses of $1,121,148.  From October 15 to                    
               December 16, * * * [Mr. Resser] did not trade in the                   
               QRF account.  On December 17, 1982, * * * [Mr. Resser]                 
               established his last spread for the year.  The December                
               17 three-way box spread resulted in a net gain of                      
               $227,442.  This reduced * * * [Mr. Resser's] overall                   
               QRF trading losses to an amount which exceeded the                     
               account RSR/QRF trading gains and his wages from                       
               Rialcor.  In addition, the TDY trading losses resulted                 
               in petitioners' paying zero tax for taxable year 1982.                 
                    * * * [Mr. Resser] was an experienced,                            
               sophisticated trader in option transactions, with the                  
               knowledge and background to make his own trading                       
               decisions.  To execute the loss generating trades, * *                 
               * [Mr. Resser] established and used an account other                   
               than the one in which he conducted his primary trading                 
               activities.  * * * [Mr. Resser] was undoubtedly aware                  
               of the favorable tax consequences arising from the                     
               offset of losses reported on Schedule C, Form 1040,                    
               against other income and deferring trading gains to                    
               subsequent years. * * *                                                
                    * * * [Mr. Resser's] overall trading pattern also                 
               indicates that the transactions were primarily tax-                    






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