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adjusted gross income for 1983, produced the following results:
A.G.I. Merit A.G.I. Loss % of A.G.I.
Per Return Losses w/o Loss w/o Merit Loss
$50,599 ($33,666) $84,265 140%
1 Ms. Rivera's adjusted gross income was the figure set forth
above. She deducted her cancellation fees, however, and when
adjustments were made for the zero bracket amount, the deduction
had the effect of lowering her otherwise taxable income by $33,666.
(4) 1983 Transactions
In 1983, there was no activity in Ms. Rivera's stock forwards
account until July. Thereafter, in trading during the last half of
1983, she realized losses of $317,463 and long-term capital gains
of $532,276. The trading records indicate income of $218,468,
including an item of $3,655 as "other" income. She retained
unrealized gains of $211,116 and carried them into 1984. On her
tax return for 1983, she applied the capital loss carryover of
$123,570 from the previous year. Respondent disallowed the capital
loss carryover. Taking into account the long-term capital loss
deduction, the disallowance increased her adjusted gross income by
$49,428. This amount, when compared to her adjusted gross income
for 1983, produces the following results:
A.G.I. Merit A.G.I. Loss % of A.G.I.
Per Return Loss w/o Loss w/o Merit Loss
$47,329 ($49,428.40) $96,775 51%
D. Leema Enterprises, Inc.
Leema, through its subsidiary Merit Securities, engaged in
trading on its own accounts in the T-bill, T-bond, and stock
forwards markets. The tax results of its trades appeared on the
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