Keeler v. Commissioner

LUCERO, Circuit Judge.

We consider whether the Commissioner of Internal Revenue properly disallowed losses incurred by petitioner-appellant K. Richard Keeler (“taxpayer”) through his participation in a derivatives market created by Merit Securities, Inc. The Commissioner determined taxpayer’s transactions lacked economic substance and were not entered into primarily for profit. The Tax Court agreed with the Commissioner, holding that taxpayer’s gains and losses from trading in the Merit market could not be recognized for tax purposes. The court also ordered Keeler to pay additional taxes for…