126 T.C. No. 15 UNITED STATES TAX COURT L.S. VINES, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 12763-04. Filed May 11, 2006. P, a lawyer for over 34 years, settled a class action law suit during 1999 and received compensation for his legal services. P received approximately half of the compensation in taxable year 1999 and half in taxable year 2000 and reported it as ordinary income for the respective taxable years. P decided to leave the practice of law and begin a business of trading securities. After P failed to cover a margin call, P’s brokerage accounts were liquidated on Apr. 14, 2000, resulting in a short-term capital loss. Throughout his career, P relied on accountants for tax advice. When P filed for an extension of time to file his 1999 tax return on Apr. 17, 2000, P did not elect the mark-to- market method of accounting pursuant to sec. 475(f), I.R.C., because P’s accountant was not aware of the mark-to-market election for securities traders or any related revenue procedure. In June 2000, P learned of the mark-to-market election for securities traders from a friend, obtained the citation of sec. 475(f), I.R.C., and learned that Rev. Proc. 99-17, 1999-1 C.B. 503,Page: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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