L.S. Vines - Page 1

                                   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,                    

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