Leema Enterprises, Inc. - Page 33




                                       - 33 -                                         

          year, were as follows:                                                      
               T.I.           Merit     T.I.     Loss % of T.I.                       
          Per Return     Losses            w/o Loss    w/o Merit Loss                 
          ($6,211)      ($81,001)       $74,790        1108%                          
               1  Ms. Rivera's adjusted gross income was $107,342.  In                
          addition to other deductions, she claimed an ordinary loss                  
          deduction of $81,001 on T-bill trades, reducing her income pro              
          tanto.  She utilized her capital losses as long-term and short-term         
          carryovers.                                                                 
                    (2)  1981 Merit Transactions                                      
                         (a)  T-Bill Options                                          
               On January 5, 1981, Ms. Rivera closed her T-bill account,              
          realizing a net gain of $80,955.  On the entire transaction, she            
          incurred a net loss of $45.  Her T-bond account closed the same             
          day, indicating proceeds of $426,959. Compared to her 1980 losses           
          in this account, the overall trading produced a net gain of                 
          $18,432.                                                                    
                         (b)  Stock Forwards                                          
               In November 1981, a stock forwards account was opened in Ms.           
          Rivera's name.  This account, No. 667, reflected an initial cash            
          deposit of $150,000; $51,400 was added in December.  Trading in             
          that account generated yearend short-term capital losses of                 
          $653,550 and yearend cancellation fees of $45,750, or a total loss          
          of $699,300.  The account maintained unrealized capital gains of            
          $700,180 into January 1982.12                                               


               12   The data in evidence does not make clear whether any of           
          the trades that combined to produce the $699,300 loss was for an            
          economic gain.  There is no indication that any such gains were             
          realized.                                                                   

Page:  Previous  23  24  25  26  27  28  29  30  31  32  33  34  35  36  37  38  39  40  41  42  Next

Last modified: May 25, 2011