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determination that the assets purport-
edly acquired by Evergreen Trading, LLC,
including but not limited to foreign
currency options, were acquired di-
rectly by the purported partners.
b. the foreign currency option(s), purport-
edly contributed to or assumed by Ever-
green Trading, LLC, are treated as never
having been contributed to or assumed by
said partnership and any gains or losses
purportedly realized by Evergreen Trad-
ing, LLC on the option(s) are treated as
having been realized by its partners.
c. contributions to Evergreen Trading, LLC
will be adjusted to reflect clearly the
partnership’s or purported partners’
income.
4. It is determined that the Euro short positions
(written call options) transferred to Evergreen
Trading, LLC constitute liabilities for purposes
of Treasury Regulation §1.752-6T, the assumption
of which by Evergreen Trading, LLC shall reduce
the purported partners’ bases in Evergreen Trad-
ing, LLC in the amounts of $26,433,171 for each of
the three partners, but not below the fair market
value of the purported partnership interest.
5. It is determined that trading losses of
$38,837,363 claimed by Evergreen Trading, LLC are
part of straddle positions as governed by § 1092
and as such are nondeductible losses in the 1999
tax year. Limitations imposed by § 1092 include
the limitation that deductible trading losses
incurred as part of straddle positions are limited
to only those amounts in excess of unrecognized
trading gains.
6. It is determined that neither Evergreen Trading,
LLC nor its purported partners entered into the
option(s) positions or purchase the foreign cur-
rency or stock with a profit motive for purposes
of § 165(c)(2).
7. It is determined that, even if the foreign cur-
rency option(s) are treated as having been con-
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Last modified: November 10, 2007