Robert E. Corrigan - Page 19

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          allocating to petitioner all the gains and losses from the                  
          account in his name only and one-half of the gains and losses               
          from the joint account held with Mrs. Corrigan.  Respondent also            
          determined that the gains and losses were short-term.  Finally,             
          respondent determined that petitioner had not substantiated the             
          deductions claimed on the Schedules C.                                      
                    A.  Substantiation of Schedule C Deductions                       
               Even if petitioner shows that he was engaged in a trade or             
          business, he is obligated to show that deductions of expenses in            
          controversy are ordinary and necessary and were paid during the             
          year of deduction.                                                          
               Petitioner did not introduce evidence showing that the                 
          expenses deducted were ordinary and necessary and/or were paid              
          during the year of deduction.  Therefore, petitioner is not                 
          entitled to the deductions for expenses claimed on the Schedules            
          C for Corrigan Enterprises.                                                 
                    B.  Dealer, Trader, or Investor                                   
               Generally, for Federal tax purposes, individuals who                   
          purchase and sell securities have been characterized into one of            
          three categories:  Dealers, traders, and investors.  See Estate             
          of Yaeger v. Commissioner, T.C. Memo. 1988-264, affd. on this               
          issue 889 F.2d 29 (2d Cir. 1989).  Petitioner concedes that he is           
          not a dealer, so any gains and losses would be capital in nature,           
          not ordinary.  See sec. 1221(a)(6).  The parties dispute whether            






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