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the ordinary course of his trade or business”. Sec. 1221(a)(1);
see also King v. Commissioner, supra at 457-458; Chen v.
Commissioner, supra; Boatner v. Commissioner, supra. As a
result, a dealer’s sales of securities are the equivalent of
sales of inventory and produce ordinary gains and losses. E.g.,
King v. Commissioner, supra at 457-458; Chen v. Commissioner,
supra; Boatner v. Commissioner, supra. Attendant business
expenses are deductible under section 162(a) and interest is not
subject to the restrictions under section 163(d) on the deduction
of “investment interest”. E.g., King v. Commissioner, supra at
457, 460.
Traders, like dealers, are engaged in the trade or business
of selling securities, but they do so for their own account.
E.g., Groetzinger v. Commissioner, 771 F.2d 269, 274-275 (7th
Cir. 1985), affg. 82 T.C. 793 (1984), affd. 480 U.S. 23 (1987);
Moller v. United States, 721 F.2d 810, 813 (Fed. Cir. 1983); King
v. Commissioner, supra at 457-458; Chen v. Commissioner, supra;
Boatner v. Commissioner, supra. Hence, their securities are not
excluded from the definition of a capital asset due to the
absence of customers, and sales thereof produce capital gains and
losses under generally applicable principles. E.g., King v.
Commissioner, supra at 457; Chen v. Commissioner, supra; Boatner
v. Commissioner, supra. Because of the trade or business
context, however, expenses are deductible under section 162(a)
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