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preparer with the firm of Marcus, Esses, & Associates, Ltd.,
informed Mr. Campbell that the $2,591,028 loss from the London
straddle would not be allowed by the Internal Revenue Service
(IRS). Nevertheless, Mr. Campbell instructed that the loss be
included in the 1983 joint Federal income tax return. Mr.
Campbell did not inform petitioner about Mr. Esses’s warning.
Mr. Campbell also never told petitioner about the London
straddle, nor that he made any kind of investment with the money
from her Refco account.
After the London straddle in 1983, Mr. Campbell was not able
to make any money on the commodities market. Mr. Campbell
explained in his testimony that the market substantially changed,
and he was unable to make any money from trading. After 1983,
the Campbells moved to a rural area of Missouri. Mr. Campbell’s
financial situation did not substantially improve until recently.
1983 Tax Return
The Campbells filed a joint income tax return for the 1983
taxable year. Mr. Esses prepared that return. The Campbells
reported adjusted gross income of $48,865 and a negative taxable
income of $57,956. Further, the Campbells reported an
overpayment of $314,229. As a result of the London straddle,
petitioner and Mr. Campbell reported a net loss of $2,591,028
from the Van Lessen account on Schedule D, Capital Gains and
Losses; Form 6781, Gains and Losses from Regulated Futures
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