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1221(1) in the Revenue Act of 1934, ch. 277, 48 Stat. 680, to
make it "impossible to contend that a stock speculator trading on
his own account is not subject to the [capital loss limitation]
provisions". H. Conf. Rept. 1385, 73d Cong., 2d Sess. 22 (1934),
1939-1 C.B. (Part 2) 627, 632; see also United States v. Diamond,
supra at 1028; Mirro-Dynamics Corp. v. United States, 374 F.2d
14, 16 (9th Cir. 1967); Kemon v. Commissioner, 16 T.C. 1026, 1032
(1951). For a detailed discussion of the legislative history of
the "to customers" amendment, see King v. Commissioner, supra at
457-458; Kemon v. Commissioner, supra at 1032; Wood v.
Commissioner, supra at 219-220.
As to petitioner's alternative argument, namely, that he
sold the Treasury securities to customers, whether an individual
sells securities to customers is a question of fact that hinges
on his or her classification as a dealer, trader, or investor.
Kemon v. Commissioner, supra at 1032. All purchasers of
securities are within one of these three categories, and only a
dealer is eligible for the section 1221(1) exception because only
a dealer has customers. United States v. Wood, supra at
1051-1052. As the Court of Appeals for the Ninth Circuit has
stated, in distinguishing these three types of purchasers:
A dealer is a person who purchases the securities
or commodities with the expectation of realizing a
profit
not because of a rise in value during the interval of
time between purchase and resale, but merely because
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