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trading activities. These expenses consisted of amounts spent on
supplies, books, journals, computer software, online services,
classes, seminars, travel, and meals.
Respondent determined in the notice of deficiency that the
$200 and $28 expenses deducted for 2002 were deductible under
section 212. Respondent also determined that petitioner was not
entitled to deduct any of the remaining expenses claimed on his
2002 and 2003 Schedules C. As to all of the expenses, the notice
states that petitioner had not established that they were
“ordinary and necessary business expenses” or were “expended for
the purpose designated”. The notice also states as to the
claimed expenses for continuing education and ongoing services
that petitioner did not establish that any of those expenses were
incurred for the production of income or, to the extent of the
expenses claimed for education, that they “were incurred
primarily to maintain or improve skills required in your present
employment, trade, or business, or to meet the express
requirements of your employer”.
OPINION
Petitioner argues that he was in the trade or business of
trading securities and entitled to deduct expenses related to his
trading activities as “above the line” deductions pursuant to
section 162(a). Respondent argues that petitioner did not trade
his securities in a trade or business and, to the extent that his
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Last modified: November 10, 2007