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Legal Opinion

Glass v. Commissioner

United States Tax Court

Decided November 17, 1986No. Docket Nos. 13278-78, 4054-79, 5544-79, 5649-79, 7605-79, 7692-79, 8146-79, 8147-79, 8148-79, 8150-79, 8151-79, 8152-79, 8153-79, 8156-79, 8157-79, 8158-79, 8160-79, 8161-79, 8163-79, 8668-79, 8720-79, 9118-79, 9453-79, 9454-79, 9455-79, 9456-79, 9457-79, 9458-79, 9459-79, 9460-79, 9461-79, 9580-79, 9587-79, 9588-79, 9589-79, 9590-79, 9591-79, 9698-79, 9699-79, 9700-79, 9830-79, 9908-79, 9993-79, 10466-79, 11819-79, 11822-79, 12157-79, 12427-79, 12803-79, 13009-79, 13580-79, 13586-79, 13835-79, 14469-79, 14502-79, 14656-79, 14944-79, 14947-79, 15119-79, 15144-79, 15145-79, 15232-79, 15238-79, 15259-79, 15260-79, 15286-79, 15340-79, 15591-79, 16151-79, 16319-79, 16358-79, 16823-79, 17421-79, 17539-79, 321-80, 673-80, 798-80, 868-80, 956-80, 957-80, 958-80, 959-80, 960-80, 961-80, 962-80, 963-80, 964-80, 965-80, 966-80, 967-80, 1130-80, 1131-80, 1132-80, 1133-80, 1134-80, 1135-80, 1136-80, 1137-80, 1138-80, 1139-80, 1140-80, 1141-80, 1142-80, 1243-80, 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20295-80, 20296-80, 20297-80, 20298-90, 20299-80, 20362-80, 20436-80, 20521-80, 20522-80, 20531-80, 20543-80, 20574-80, 20697-80, 20699-80, 20700-80, 20701-80, 20703-80, 20768-80, 20770-80, 20771-80, 20847-80, 21035-80, 21036-80, 21037-80, 21039-80, 21126-80, 21127-80, 21128-80, 21129-80, 21130-80, 21179-80, 21180-80, 21188-80, 21282-80, 21817-80, 22035-80, 22085-80, 22195-80, 22511-80, 22512-80, 22867-80, 22981-80, 277-81, 278-81, 279-81, 387-81, 388-81, 389-81, 390-81, 391-81, 392-81, 463-81, 537-81, 538-81, 666-81, 667-81, 668-81, 669-81, 670-81, 705-81, 910-81, 911-81, 927-81, 940-81, 998-81, 1000-81, 1009-81, 1051-81, 1109-81, 1110-81, 1232-81, 1233-81, 1240-81, 1241-81, 1242-81, 1403-81, 1404-81, 1405-81, 1501-81, 1539-81, 1563-81, 1802-81, 1871-81, 2029-81, 2030-81, 2078-81, 2373-81, 2398-81, 2459-81, 2579-81, 2658-81, 3001-81, 3002-81, 3003-81, 3004-81, 3066-81, 3185-81, 3269-81, 3286-81, 3337-81, 3544-81, 3545-81, 3546-81, 3547-81, 3561-81, 3583-81, 3618-81, 3802-81, 4135-81, 4270-81, 4348-81, 4419-81, 4467-81,PublishedCited by 159 opinions

During certain of the years in issue, petitioners engaged in commodity straddle transactions connected with trading on the London Metal Exchange. Petitioners intentionally sustained losses in year one of their commodity straddle transactions by entering into closing transactions on their sold commodity options.

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During certain of the years in issue, petitioners engaged in commodity straddle transactions connected with trading on the London Metal Exchange. Petitioners intentionally sustained losses in year one of their commodity straddle transactions by entering into closing transactions on their sold commodity options. Held: Since the intentionally realized losses were not necessary or helpful in profiting from difference gains in petitioners' commodity straddle transactions, the transactions lacked a business or profit-making purpose. The losses were not "intended" by secs. 165(c) and 1234, I.R.C.…

1Opinion of the Court

NlMS, Judge:

In these consolidated cases, respondent determined aggregate deficiencies in excess of $61 million in petitioners’ Federal income taxes for the years 1975 through 1980.2

Each of the petitioners in these cases entered into a series of transactions herein sometimes referred to for convenience as the London Options Transaction. The issues for decision are: (1) Whether the London Options Transactions are shams; and (2) if the transactions are not shams, whether they were entered into for profit under the standard set forth in section 108 of the Tax Reform Act of 1984.3

Petitioners in…

2Cases cited13 opinions

  1. Gregory v. HelveringSupreme Court of the United States · 1935
  2. Knetsch v. United StatesSupreme Court of the United States · 1960
  3. Helvering v. GregoryCourt of Appeals for the Second Circuit · 1934
  4. Falsetti v. CommissionerUnited States Tax Court · 1985
  5. Brown v. CommissionerUnited States Tax Court · 1985

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3Cited by159 opinions

  1. Freytag v. CommissionerUnited States Tax Court · 1987
  2. Woods v. CommissionerUnited States Tax Court · 1989
  3. Kenneth P. Kirchman and Budagail S. Kirchman, Leo P. Ayotte and Nancy C. Ayotte v. Commissioner of Internal RevenueCourt of Appeals for the Eleventh Circuit · 1989
  4. Ewing v. CommissionerUnited States Tax Court · 1988
  5. Louis Buddy Yosha v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1988

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