- 33 -
himself a dealer, and that he did not hold himself out as a
dealer undercuts his argument that he was one. See Mirro-
Dynamics Corp. v. United States, 374 F.2d 14 (9th Cir. 1967); see
also Furer v. Commissioner, supra; Michelson v. Commissioner,
T.C. Memo. 1990-27, affd. 951 F.2d 288 (10th Cir. 1991); Tybus v.
Commissioner, T.C. Memo. 1989-309; Huebschman v. Commissioner,
T.C. Memo. 1980-537.
Petitioner argues vigorously that his customers were the
primary dealers to whom he sold the securities. We do not agree.
Petitioner's proffered definition of the word "customer", to wit,
any person with whom he had established business relationships
and with whom he dealt regularly on a principal-to-principal
basis, misses the mark. As we stated in Frankel v. Commissioner,
supra, in refusing to adopt a similar definition that was
proffered by the taxpayer there,17 a "seller of securities who
does not perform a merchandising function--who does not act as a
middleman bringing buyer and seller together--is considered a
trader, and as such, not even the broadest array of vendees will
be his 'customers'".
Although not identical, the instant case is analogous to
Frankel v. Commissioner, supra. There, the taxpayer was an
associate of an investment firm who began trading GNMA's for his
17 The taxpayer in Frankel v. Commissioner, T.C. Memo.
1989-39, asked the Court to adopt a definition under which a
"customer" is "any person who buys an asset from another person".
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