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Peabody credited petitioner with $698.85 in interest income,5
$15,882.21 in dividends, and an additional $458.41 in capital
gains from miscellaneous sales of securities. In November of
1991, after some heated correspondence, petitioner authorized
Kidder Peabody to liquidate the account. Kidder Peabody did so
and, as required by law, furnished the required return to the
IRS, reporting the interest income, dividends, and other
miscellaneous proceeds as well as the gross liquidation proceeds
of $387,686.49 to petitioner. Petitioner, as the owner of the
securities, is taxable on the income earned by the securities and
on the subsequent gain generated by their sale.
We reject petitioner’s contention that Kidder Peabody
engaged in a “tortious conversion” of his account by refusing his
directions in 1987 to close the account.6 Petitioner argues that
Kidder Peabody, having exercised control over his property,
became the owner of that property and is taxable on the gains
realized when it was sold. He concludes that his receipt of the
5 Respondent mistakenly determined that petitioner had
unreported interest income in the amount of $643. At trial,
respondent noted this mistake, and it has not prejudiced
petitioner, who is taxable on the full $698.85.
6 Although petitioner has declined to file a brief, he has
set forth his arguments in a document entitled “Tax Protest”
which he attached to his petition herein and also introduced into
evidence at trial. He has set forth additional arguments in a
trial memorandum and made still others at trial.
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