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(line 20b) of $13,439. In addition, petitioner reported a loss
of $13,131 as an adjustment to long-term disability income. Of
the $82,862 reported in wages, salaries, and tips: Met Life
reported to respondent wage income totaling $78,950; pension
income was reported by the Social Security Administration as
$15,810; $9,195 was reported as income from interest and
dividends; and $216 was reported by Putnam Investments as an
early IRA distribution.
Further trial of this case was held on May 9, 2005.
Petitioner argued that he was engaged in the trade or business of
short-term trading of stock futures contracts during 2000.
Petitioner deducted both his business expenses from the gross
receipts of his investment transactions, and a capital loss
arising from these activities. Petitioner also claimed a carry
over of a net operating loss from 1999 to his 2000 taxable year.
Discussion
In general, the Commissioner’s determination set forth in a
notice of deficiency is presumed correct. Welch v. Helvering,
290 U.S. 111, 115 (1933). Moreover, deductions are a matter of
legislative grace and are allowed only as specifically provided
by statute. INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84
(1992); New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440
(1934). In pertinent part, Rule 142(a)(1) provides the general
rule that “The burden of proof shall be upon the petitioner”. In
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