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(1976) and various other cases for the proposition that ordinary
loss treatment may be permitted with respect to assets that were
acquired for a business purpose rather than for an investment
purpose.
A loss from the sale or exchange of a capital asset is
generally subject to section 1211(a), which limits the amount of
the loss allowed. See sec. 165(a). Section 1221 generally
defines “capital asset” as “property held by the taxpayer
(whether or not connected with his trade or business)”, but
specifically excludes five classes of assets. The cases cited
and relied upon by petitioners were all decided under the
doctrine of Corn Prods. Refining Co. v. Commissioner, 350 U.S. 46
(1955), in which the Supreme Court appeared to recognize a
nonstatutory exception to the section 1221 definition of capital
asset, in holding that certain futures contracts acquired and
held for a business purpose qualified as a noncapital asset. In
Arkansas Best Corp. v. Commissioner, 485 U.S. 212, 223 (1988),
however, the Supreme Court called into question the continuing
vitality of many of the cases that had been decided under the
Corn Products doctrine, stating that “a taxpayer’s motivation in
purchasing an asset is irrelevant to the question whether the
asset is ‘property held by a taxpayer (whether or not connected
with his business)’ and is thus within � 1221’s general
definition of ‘capital asset.’”
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