- 32 -
carryovers) in 1987, 1988, and 1989, respectively,15 and he
reported net long-term capital gains of $4,729,387, $42,213,314,
and $53,119,895 on his 1984, 1985, and 1986 returns,
respectively, for which he took into account 60-percent
deductions under section 1202. We also believe that he was
familiar with the classifications of dealer, trader, or investor.
We discussed the difference between a dealer and a trader almost
10 years before petitioner first entered the securities industry,
see Kemon v. Commissioner, 16 T.C. at 1032-1033, and this
distinction was almost 35 years old at the time that he filed his
1984 return. We also take into account that all of the subject
returns were prepared by large, multinational accounting firms,
and that the 1985 return noted specifically that petitioner was a
"trader", and not an "investor".16 The fact that petitioner did
not have himself licensed as a dealer, that he did not consider
15 In other words, notwithstanding the multi-million-dollar
capital losses that petitioner reportedly incurred during these
years, he limited his capital loss deduction for 1987, 1988, and
1989 to $3,000 each. We also note that petitioner reported
"total income" of $44,122,440, $24,267,722, and $58,882 for these
respective years, and that he reported that his related tax
liability was $16,243,036, $6,661,226, and $605, respectively.
16 Petitioner testified that he retained Coopers & Lybrand
to prepare his tax returns because it was more familiar than
Peat, Marwick with the securities area. Petitioner implied
during his testimony that Coopers & Lybrand saw that Peat,
Marwick had incorrectly classified him as a "dealer", and that
Coopers & Lybrand amended his 1985 through 1989 returns to
correct Peat, Marwick's mistake. We are unpersuaded by this
testimony. As a point of fact, petitioner's 1989 tax return
classified petitioner as a trader, and this return was prepared
by Coopers & Lybrand.
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