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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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Last modified: May 25, 2011