Adnee v. Commissioner
United States Tax Court
Partnership, engaged in the real estate subdivision business, had surplus funds as a result of adverse zoning in respect of part of its property, and determined to use such funds in securities speculation. It bought and sold securities and made short sales of securities, for its own account, through a licensed broker. Held, the net loss of $ 114,115.59 which it sustained from all such trading in the year ending March 31, 1959, was a capital loss and not an ordinary loss.
1Opinion of the Court
OPINION
Raum, Judge:
Petitioners argue that Triton’s losses from trading in securities, particularly its losses on short sales, must be treated as ordinary losses rather than capital losses. We disagree.
The proper classification of the net loss in question does not depend upon the number of transactions or the degree of trading activity or the fact that the principal component of the net loss was attributable to the short sales. Rather, it depends upon whether the securities sold in connection with the regular sales and the securities used to close the short sales constituted “capital assets”…
2Cases cited4 opinions
- Schafer v. HelveringSupreme Court of the United States · 1936
- Schafer v. HelveringCourt of Appeals for the D.C. Circuit · 1936
- Commissioner of Internal Revenue v. BurnettCourt of Appeals for the Fifth Circuit · 1941
- Burnett v. CommissionerUnited States Board of Tax Appeals · 1939
3Cited by6 opinions
- United States v. Patrick Henry DiamondCourt of Appeals for the Fourth Circuit · 1986
- Tybus v. CommissionerUnited States Tax Court · 1989
- Michelson v. CommissionerUnited States Tax Court · 1990
- Adnee v. CommissionerUnited States Tax Court · 1963
- Huebschman v. CommissionerUnited States Tax Court · 1980
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