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Based on the limited number of securities transactions
in 1999 as set forth above and since [petitioner] was
still engaged in the full time practice of law for all
of 1999, it seems clear that he did not qualify as a
trader in securities in 1999 and therefore has not
adopted a method of accounting for his trade or
business as a securities trader in any year prior to
2000. For this reason, there is no adjustment under
section 481(a).
Caplin & Drysdale advised petitioner that he had bound
himself to adopt the mark-to-market method of accounting for his
trading business by filing the section 475(f) election and the
protective Form 3115 and requesting section 9100 relief on
July 21, 2000. On that basis, Caplin & Drysdale advised
petitioner that he could resume his securities trading activities
without adversely affecting his request for section 9100 relief.
Mr. Sellers gave petitioner the same advice. Based on Caplin &
Drysdale’s and Mr. Sellers’ advice, petitioner resumed his
trading activities on July 26, 2000.
Between the date that petitioner should have filed his
section 475(f) election, April 17, 2000, and the date petitioner
actually filed his section 475(f) election, July 21, 2000,
petitioner: (1) Did not purchase any publicly-traded stock; (2)
did not sell any publicly traded stock; and (3) had no gain or
loss from the disposition of any publicly traded stock. Thus,
petitioner’s losses on July 21, 2000, were exactly the same as
they were on April 17, 2000.
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