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In Resser I, we held that Mr. Resser's "insubstantial and
infrequent" personal trading activity in account QRF was not
conducted with the regularity or continuity necessary for the
activity to be considered a trade or business. Mr. Resser's
segregation of his personal trades into a separate account, the
methodical closing out of loss legs and the holding open of
unrealized gain legs, his trading of TDY options in account QRF
on only 6 days of the year, the establishment of only 9 TDY
option spreads on those 6 days, and his need to shelter
substantial earned wages and other income also persuaded the
Court that Mr. Resser was not motivated primarily by profit when
he entered the transactions, but motivated solely by tax
considerations. Thus, as our opinion in Resser I makes clear,
deduction of Mr. Resser's account QRF losses was prohibited by
section 165(c)(1) and (2). Moreover, the courts have
consistently held that a transaction entered into solely for
favorable tax consequences, having no commercial, legal, or
profit objective, will not be given effect for Federal income tax
purposes. See, e.g., Frank Lyon Co. v. United States, 435 U.S.
561 (1978); Knetsch v. United States, 364 U.S. 361 (1960); Yosha
v. Commissioner, supra; Rice's Toyota World, Inc. v.
Commissioner, 752 F.2d 89 (4th Cir. 1985), affg. in part and
revg. in part 81 T.C. 184 (1983); Patin v. Commissioner, 88 T.C.
1086 (1987), affd. without published opinion 865 F.2d 1264 (5th
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