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204(a)(7) of the Tax Reform Act of 1986 (TRA), Pub. L. 99-514,
100 Stat. 2146. We hold it is not. Unless otherwise indicated,
section references are to the Internal Revenue Code in effect for
the subject years. Rule references are to the Tax Court Rules of
Practice and Procedure.
Background
All facts were stipulated and are so found. The
stipulations of facts and the exhibits submitted therewith are
incorporated herein by this reference. Petitioner is a
corporation organized under the Illinois General Not for Profit
Corporation Act to operate a commodity exchange in Chicago,
Illinois. Its principal place of business is in Chicago, and it
did not own any stock in a corporation during the relevant years.
Petitioner primarily provides and regulates a commodity
exchange where futures contracts and options on futures contracts
are traded. Petitioner also establishes and enforces trading
rules, collects and disseminates information about its markets,
and provides the clearing mechanism for trades executed on its
commodity exchange. Petitioner has no shareholders but is owned
by its approximately 2,700 members, approximately 1/4 of which
are corporations and the remainder of whom are individuals. Its
member’s customers who have futures contracts and options traded
on its commodity exchange are located worldwide, and it receives
a significant portion of its income from foreign subscribers.
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