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A It would be the same situation.
Q In 2000?
A It would be the same situation.
By 1998, Mr. Arberg was conducting securities trades through
accounts held in his name at Charles Schwab and/or Salomon Smith
Barney. At some point during 1998 or 1999 not clear from the
record, a brokerage account in the name of Ms. Quinn was opened
at E Trade Securities, Inc. Because of employee trading
restrictions imposed as a result of her position with Salomon
Smith Barney, Ms. Quinn was required to, and did, obtain the
permission of her superior to establish the E Trade account.
According to petitioners, a principal source of funding for the E
Trade account was compensation Mr. Arberg received from his
consulting work.
Tax Reporting
Petitioners filed separate Federal income tax returns for
1998 and 1999. They then filed a joint Form 1040, U.S.
Individual Income Tax Return, for 2000. For 1998, Mr. Arberg
reported wage income of $76,766 and included with his return a
Schedule C, Profit or Loss From Business, for a business
characterized as “Mark to Market Trading”.3 The Schedule C
3 The complete copy of Mr. Arberg’s Form 1040 for 1998 in
the record is an unsigned copy provided by petitioners to the
Internal Revenue Service (IRS) during the examination of
Mr. Arberg’s 1999 return, addressed infra. The return was
(continued...)
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