- 6 - We conclude that petitioner’s earnings in 1994 from his commodities trading transactions do not qualify for an exception from self-employment tax. Petitioner has not established that his trading activity in commodities futures contracts in 1994 was outside the scope of his normal trading activity. Petitioner has not established that the trades on his behalf in 1994 were less frequent or regular than the trades in prior years. Other than the use of a broker on the floor of the CBOT (in lieu of petitioner himself being on the floor), the evidence in this case does not establish any significant factual differences in petitioner’s trading activity. Petitioner remained a member of the CBOT. On his 1994 Federal income tax return, petitioner indicated that he was in the trade or business of trading commodities futures contracts, and he claimed his related expenses as ordinary and necessary expenses of a trade or business. We conclude that the use of a floor broker by petitioner does not substantially alter the normal course of petitioner’s commodities trading activity and that the earnings petitioner realized therefrom in 1994 are subject to self-employment tax. In Kovner v. Commissioner, 94 T.C. 893, 906 (1990), for purposes of qualifying losses as ordinary losses under sec. 108(a) of the Deficit Reduction Act of 1984, Pub. L. 98-369, 98Page: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011