- 25 -
(4) 1984 Merit Transactions
In January 1984, Mr. Keeler ended his participation in the
Merit programs.10 In that month, he incurred short-term capital
losses of $9,591,801 and had long-term capital gains of
$19,180,297--including the $9,851,790 he had retained as unrealized
capital gains from his trading in 1982. He withdrew his cash
balance of $1,197,891. On his 1984 Federal income tax return, Mr.
Keeler netted his capital gains against his capital losses and
applied the 60-percent reduction for taxable long-term capital
gains permitted by section 1202(a). He reported taxable income of
$5,079,712 and taxes of $2,505,189. To this amount, he credited
prepayments and credits of $1,740,800 and paid the resulting tax
liability of $764,399.11
B. Leon E. Richartz
Dr. Richartz taught economics and finance courses at the
University of Illinois and the University of California at Berkeley
and coauthored a book entitled "Vertical Market Structures".
During his academic career, Dr. Richartz began using computers to
develop trading models in making markets more efficient. Beginning
in 1971, Dr. Richartz worked as a professional trader for his own
account and for others. He also tried to earn additional
10 Sec. 101(a) of the Deficit Reduction Act of 1984
(DEFRA), Pub. L. 98-369, 98 Stat. 494, repealed the exception of
stock from the loss disallowance rules of sec. 1092, effective
for positions established after Dec. 31, 1983, in taxable years
beginning after Dec. 31, 1983.
11 Sometime later Mr. Keeler filed an amended return
seeking to apply carrybacks from 1985.
Page: Previous 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 NextLast modified: May 25, 2011