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We have already stated why we believe petitioner did not
benefit from the London straddle. She lost access to $2.6
million in her account, and she never saw that money again. As
we have noted, the Campbells’ lifestyle significantly declined
after 1983, and they were forced to move because of Mr.
Campbell’s misfortunes in the options trading business.
Further, we believe imposing a tax liability of more than
$2.8 million as a result of a disallowed transaction of which
petitioner had no actual or constructive knowledge would be
extremely inequitable. Despite Mr. Campbell’s recent success in
his trading, we believe that petitioner would suffer severe
economic hardship if she faced such a liability. She is in her
sixties with a limited number of working years. She has only a
small retirement account, her home, and a 1993 Ford explorer.
Respondent argues that it is not inequitable to hold
petitioner solely liable for the deficiency because the $3.5
million sheltered by the London straddle was attributable to her.
Respondent further suggests that petitioner misled him during the
Appeals process because she did not explicitly tell him that the
account generating the gain sheltered by the London straddle
deduction belonged to her. We disagree.
We have found that petitioner’s involvement in the Refco
account was in her capacity as a nominee only. Mr. Campbell
stated that his friends at Refco opened the account for her.
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