Frank Chen - Page 2

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                    2.  Held, further, P is entitled to deduct his                    
               1999 net loss from purchases and sales of securities to                
               the extent of $3,000.  Secs. 165(f), 1211(b)(1), I.R.C.                

               Frank Chen, pro se.                                                    
               Paul T. Butler and Lindsey D. Stellwagen, for respondent.              


                       MEMORANDUM FINDINGS OF FACT AND OPINION                        

               HALPERN, Judge:  By notice of deficiency mailed to                     
          petitioner on October 15, 20021 (the notice), respondent                    
          determined a deficiency in petitioner’s 1999 Federal income tax             
          of $611,357 and additions to tax totaling $252,093.  On brief,              
          respondent concedes the additions to tax.  As a result of an                
          agreement between the parties, the only issue remaining for                 
          decision is whether petitioner’s net loss of $84,794 from the               
          purchase and sale of securities during 19992 is, for that year,             
          deductible in full, or, pursuant to a limitation applicable to              
          capital losses, only to the extent of $3,000.                               
               Unless otherwise indicated, all section references are to              
          the Internal Revenue Code in effect for 1999, and all Rule                  



               1  Because of administrative error, the notice of deficiency           
          was dated Oct. 15, 2003.                                                    
               2  We assume from the stipulation of the parties that the              
          net loss of $84,794 was realized upon actual sales of the                   
          securities in question.                                                     





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