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Petitioners’ revised position entailed two Schedules C for
Mr. Arberg. One addressed his business as a “Trader in
Securities - Mark-to-Market accounting”. That Schedule C
reported zero gross income and claimed expenses of $1,207 for
depreciation, $42,570 for other interest, $2,378 for office
expenses, $1,067 for supplies, $1,000 for travel, and $4,311 for
other expenses (comprising $2,907 for trading seminars and $1,404
for trading telephone). The resultant net loss for the alleged
securities business was $52,533.
The other Schedule C dealt with a business labeled
“Consultant”. Reported gross income was again zero, and the
expenses enumerated were $1,068 for supplies, $29,072 for travel,
$1,332 for meals and entertainment, and $4,212 for other expenses
(telephone). Those figures led to a net loss of $35,684 for the
consultant business, and a total claimed Schedule C loss for both
business of $88,217.
The revised position also incorporated a Form 4797, Sales of
Business Property, reporting an ordinary loss of $313,413. An
attached statement detailed that the claimed loss was computed
from three components: (1) A $380,595 loss on trader
transactions in the E Trade Securities account (calculated by
subtracting an aggregate basis of $35,291,463 from an aggregate
sales price of $34,910,868); (2) a $65,372 gain on trader
transaction in the E Trade Securities account; and (3) a $1,810
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