- 2 - Held: The gain from the sale of stock is portfolio income pursuant to sec. 469(e)(1)(A), I.R.C., and sec. 1.469-2T(c)(3), Temporary Income Tax Regs., 53 Fed. Reg. 5686, 5713 (Feb. 25, 1988), and cannot be offset by P’s passive losses. Martha A. Roof, for petitioner. Louis B. Jack, for respondent. OPINION VASQUEZ, Judge: In the notice of deficiency, respondent determined deficiencies of $38,145 and $79,812 in petitioner’s Federal income taxes for 1992 and 1993, respectively. After concessions, the issue for decision is whether gain from the sale of stock pledged as collateral for a letter of credit which guaranteed petitioner’s underwriting activities is portfolio income. Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the years in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure. Background The parties submitted this case fully stipulated. The stipulation of facts and the attached exhibits are incorporated herein by this reference. At the time the petition was filed, petitioner resided in Pasadena, California. General Background on Underwriting for Lloyd’s Lloyd’s of London’s (Lloyd’s) business consists of insuringPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
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