Keith M. Rudman - Page 3




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          U.S. Treasury bond futures contracts for his own account on the             
          trading floor of the CBOT.                                                  
               In 1994, the Commodity Futures Trading Commission (CFTC)               
          initiated an investigation of petitioner regarding alleged                  
          improper trading conduct, the specifics of which are not in the             
          record.  Petitioner remained a member of the CBOT.  Because of              
          the ongoing CFTC investigation, however, in 1994 while the                  
          investigation was pending, petitioner chose to conduct his trades           
          through a floor broker rather than conduct his trades directly on           
          the trading floor of the CBOT.                                              
               In 1994, petitioner realized a total of $1,541,926 in net              
          gains relating to his trading in commodities futures contracts              
          through the broker, and petitioner paid more than $89,000 in                
          commissions to the floor broker.                                            
               On November 21, 1994, as a result of the settlement with the           
          CFTC of the above investigation, petitioner was allowed to trade            
          directly on the floor of the CBOT under the supervision of                  
          another trader.                                                             
               On his timely filed 1994 Federal income tax return,                    
          petitioner treated the total $1,541,926 in net gains (that                  
          petitioner realized in 1994 relating to his trading activity in             
          commodities futures contracts through the broker) as capital                
          gains and reported them on Schedule D, Capital Gains and Losses,            
          of his income tax return.  On his Schedule C, Profit or Loss from           






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