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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, 98
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