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FINDINGS OF FACT
Some facts have been stipulated and are so found. The
stipulated facts and the exhibits submitted therewith are
incorporated herein by this reference. Petitioner resided in
Colorado Springs, Colorado, when his petition was filed.
Petitioner holds a bachelor’s degree in accounting and began
investing in the stock market in 2001. In 2002, he developed
software as an employee of Analysts International and was paid
wages of $28,543. In January 2002, he suffered severe injuries
from a car accident which left him unable to work for 4 months.
In August 2002, he received a settlement of $71,553 (after the
payment of legal fees and other expenses) as to the accident.
Afterwards, he ceased his employment and began trading in the
market to a greater extent. He purchased software and opened
brokerage accounts to enable him execute trades quickly.
Petitioner’s 2002 trading activity was conducted through
Datek, a brokerage subsequently acquired by Ameritrade. In 2002,
petitioner made 46 purchases totaling $26,108 and 14 sales
totaling $17,004. At the close of 2002, his brokerage account
was worth $11,774. On a Schedule D, Capital Gains and Losses,
attached to his 2002 Federal income tax return, petitioner
reported that he had realized a $2,127 capital gain from 11
sales. As reported, six transactions had a holding period of
less than 61 days, and three of the transactions had a holding
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