- 5 -
section 1256 contracts or property related to
such contracts. [Emphasis added.]
A commodities dealer is defined in section 1402(i)(2)(B) as
“a person who is actively engaged in trading section 1256
contracts and is registered with a domestic board of trade which
is designated as a contract market by the Commodities Futures
Trading Commission.” The term “section 1256 contract” means any
regulated futures contract -- such as the U.S. Treasury bond
futures contracts in which petitioner traded. Sec. 1402(i)(2)(C).
Petitioner argues that his trading activity in 1994 through
a broker did not occur in the normal course of his commodities
trading activity and therefore that section 1402(i) does not
apply. Petitioner argues that his regular trading activity in
prior years (which involved petitioner’s personally making trades
on the floor of the CBOT) is distinguishable from the trades in
1994 which petitioner, because of the CFTC investigation,
conducted through a floor broker. Petitioner notes particularly
that he incurred $89,000 in broker’s fees relating to the latter
transactions.
Respondent contends that throughout 1994 petitioner was a
commodities dealer and that the $1,541,926 in earnings petitioner
realized from his commodities futures trades is subject to self-
employment tax.
Page: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011