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Deficiency Notice and Tax Court Proceedings
Respondent issued petitioners a deficiency notice for tax
years 1996 through 2001. Respondent determined in the deficiency
notice that the ordinary losses petitioners claimed in 2000 and
2001 from Mr. Knish’s and SPK’s securities trading activity were
capital losses. Respondent determined that the losses were
capital losses because petitioners and SPK had not made effective
mark-to-market elections under section 475(f). Respondent
determined alternatively that the losses were capital losses even
if petitioners and SPK made effective mark-to-market elections
because the securities trading activity was not a trade or
business activity. Petitioners filed a timely petition.
The parties filed cross-motions for partial summary judgment
on whether petitioners and SPK made effective mark-to-market
elections for the securities trading activity under section
475(f).
Discussion
Summary Judgment Standard
We are asked to decide whether it is appropriate to grant
partial summary judgment. Summary judgment is intended to
expedite litigation and avoid unnecessary and expensive trials.
See, e.g., FPL Group, Inc. & Subs. v. Commissioner, 116 T.C. 73,
74 (2001). Either party may move for summary judgment upon all
or any part of the legal issues in controversy. Rule 121(a).
The Court may grant partial summary judgment on a matter
concerning which there is no genuine issue as to any material
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