- 27 -
weeks earlier, realizing a net gain of $1,048. On February 19,
1980, he withdrew the resulting $26,048 from his account and ceased
trading in that account for several months.
In August 1980, Dr. Richartz opened a four-participant trade
sequence, joining with Leema and an investment adviser, Mr.
Alessandra, to take positions opposite Monex, which had a taxable
year ended September 30, 1980. The trade closed on November 4,
1980. It produced $57,942 in ordinary losses for Dr. Richartz, as
well as ordinary losses of $14,955 for Mr. Alessandra. The trades
produced a taxable gain of $67,068 for Monex, but that amount was
not recognized until its taxable year ended September 30, 1981.
Dr. Richartz performed no other T-bill trading until the end
of 1980. He then participated in four other T-bill sequences, all
opened and switched in December 1980. They followed the familiar
open-switch-close pattern. Opened on December 5 and 17, 1980, none
produced taxable gains that year. Instead, when the switches
occurred on December 29 and 30, 1980, Dr. Richartz realized
additional losses of $1,142,630. He carried unrealized gains of
$1,155,550 for 5 days into his next taxable year, when these
trading sequences closed. On the next day, he withdrew his cash
balance of $105,276, representing a cash loss of $44,724.
Dr. Richartz included an ordinary loss from his T-bill options
of $450,901 on his 1980 Federal income tax return. This loss,
compared to his adjusted gross income in the same year, revealed
the following:
Page: Previous 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 NextLast modified: May 25, 2011