Mayer v. Commissioner

Ps employed money managers who engaged in numerous securities transactions on Ps' behalf during the years in issue. Ps actively oversaw the money managers. Ps' focus was long-term capital growth. The average holding period of Ps' stocks sold during the years in issue was approximately 1 year. Ps' principal sources of income from their securities transactions were dividends, interest, and long-term capital gains. Ps did not allocate any costs of their securities activity to particular purchases or sales. Held: Ps were mere investors, and their securities activity does not constitute a trade or…