Peter K. Chow - Page 6

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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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