Robert E. Corrigan - Page 18

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          sickness, even if it were for punitive damages.  Accordingly, we            
          hold that petitioner has not shown that he is entitled to exclude           
          the $325,000 settlement from his gross income.                              
               II.  Commodity and Option Trading Activity                             
               During the years under consideration, petitioner was a                 
          successful stockbroker earning annual commissions ranging from              
          $200,000 to in excess of $1 million.  In addition, during the               
          years under consideration, petitioner claimed to be in the trade            
          or business of trading options and commodities.  Substantially              
          all of the transactions reported from this activity consisted of            
          option trading in three separate stock brokerage trading                    
          accounts.  The three accounts included one in petitioner’s name,            
          one held jointly with Mrs. Corrigan, and one in Mrs. Corrigan’s             
          name.  Likewise, the cost of goods sold reflected on the                    
          Schedules C was, in substantial part, the purchase price of the             
          options that had been sold.  In addition to the cost of goods               
          sold, petitioner claimed deductions for various expenses.  The              
          activity was reported on the Schedules C under the name “Corrigan           
          Enterprises”, and losses were claimed for 1987, 1988, 1989, and             
          1991 of $96,098, $25,774, $124,073, and $34,907, respectively.              
               Respondent determined that this activity produced capital              
          rather than ordinary gains and losses.  In addition, respondent             
          allocated the gains and losses between petitioner and Mrs.                  
          Corrigan in accord with their ownership of the accounts,                    






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