Lee B. Arberg and Melissa A. Quinn - Page 8




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          reflected gross income of $49,777, expenses of $176,452, and a              
          resultant net loss of $126,675.  The expenses comprised mortgage            
          interest of $5,799, office expenses of $3,240, travel of $6,147,            
          meals and entertainment of $1,421, utilities of $3,987, and other           
          expenses of $155,858.  The other expenses were explained as                 
          follows:                                                                    
               Tax payer elects to be a mark to market trader.                        
               Code Section 475 (f) (1) (A)                                           
               Losses on mark to market trades and holdings at year end-              
               see attached schedule.                                                 
          The attached schedule listed 17 securities lots, each with a date           
          acquired and date sold between January 7 and September 18, 1998,            
          and reflected a net loss on the transactions of $155,858.29.                
          Appended below the listing was the statement:  “As of 12/31/98,             
          there were no open positions to mark to market.”   The                      
          transactions were conducted through the account held in Mr.                 
          Arberg’s name at Charles Schwab.  A Schedule D, Capital Gains and           
          Losses, was also attached to the return and repeated in an                  
          annotation that “Tax Payer elects to be a mark to market trader             
          under code section 475 (f)(1)(A)”.                                          

               3(...continued)                                                        
          introduced by respondent at trial and was admitted into evidence.           
          The parties also included amongst the stipulated exhibits a copy            
          of a Schedule C characterized in the attendant stipulation as               
          having been attached to the 1998 return.  The Court is satisfied,           
          given the discussions at trial and particularly in light of fact            
          that the Schedule C attached to the unsigned return is identical            
          to the stipulated copy, that the unsigned copy of the complete              
          1998 return is an accurate representation of the return filed by            
          Mr. Arberg for that year.                                                   






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