Herman N. and Veronica Welter - Page 1

                                 T.C. Memo. 2003-299                                  


                               UNITED STATES TAX COURT                                


                    HERMAN N. AND VERONICA WELTER, Petitioners v.                     
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      


               Docket No. 5041-01.             Filed October 29, 2003.                


                    Ps incorporated their farming operations in 1993.                 
               Prior to the incorporation, P-H engaged in commodities                 
               trading activities through several brokerage accounts.                 
               After the incorporation, P-H continued to engage in                    
               such activities through those accounts.  Ps treated the                
               gains and losses from P-H’s commodities trading                        
               activities as ordinary income or loss, as applicable,                  
               on their 1994-96 Federal income tax returns.                           
                    Held:  Since P-H’s commodities trading activities                 
               do not constitute hedging transactions, gains and                      
               losses therefrom are capital in nature.                                
                    Held, further, Ps are liable for penalties under                  
               sec. 6662, I.R.C., as determined by R.                                 
               Bob A. Goldman, for petitioners.                                       
               Lisa K. Hartnett, for respondent.                                      





Page:   1  2  3  4  5  6  7  8  9  Next

Last modified: May 25, 2011