- 4 - through those accounts after the incorporation, without transferring the accounts to the corporations. Petitioners represented to respondent that they continued to maintain the brokerage accounts in Mr. Welter’s name after the incorporation as a matter of convenience and to avoid additional filing and account maintenance fees and expenses. During the years at issue, Mr. Welter’s commodities trading activity consisted primarily of futures transactions in soybeans, oats, and corn. On their Federal income tax returns for the years at issue, petitioners reported the following amounts as gain or loss from Mr. Welter’s commodities trading activity: Year Gain (Loss) 1994 ($189,164.00) 1995 33,248.07 1996 (142,345.30) In each instance, petitioners treated the gain or loss as ordinary income or loss. In the notice of deficiency, respondent recharacterized such amounts as capital gain or loss, as applicable. OPINION I. Commodities Trading Activity A. Arguments of the Parties Petitioners claim ordinary income and loss treatment with respect to Mr. Welter’s commodities trading activity on the ground that such activity consisted of hedging transactionsPage: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011