More v. Commissioner
United States Tax Court
P is an individual underwriter for Lloyd's of London (Lloyd's). As an underwriter, P is required to demonstrate that he can cover potential losses on the policies that he underwrites, a.k.a., show means. In order to show means, P posted a letter of credit issued by Bank Julius Baer (BJB) with Lloyd's. The letter of credit was secured by P's preexisting stock portfolio. The policies that P underwrote for the taxable years 1992 and 1993 incurred losses.
Read the full summary
P is an individual underwriter for Lloyd's of London (Lloyd's). As an underwriter, P is required to demonstrate that he can cover potential losses on the policies that he underwrites, a.k.a., show means. In order to show means, P posted a letter of credit issued by Bank Julius Baer (BJB) with Lloyd's. The letter of credit was secured by P's preexisting stock portfolio. The policies that P underwrote for the taxable years 1992 and 1993 incurred losses. As a result of the losses, BJB sold P's stock at a substantial gain during those years. P reported the losses from his underwriting activities…
1Opinion of the Court
OPINION
VASQUEZ, Judge:
In the notice of deficiency, respondent determined deficiencies of $38,145 and $79,812 in petitioner’s Federal income taxes for 1992 and 1993, respectively. After concessions, the issue for decision is whether gain from the sale of stock pledged as collateral for a letter of credit which guaranteed petitioner’s underwriting activities is portfolio income.
Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the years in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure.
Background
The parties…
2Cases cited7 opinions
- Federal Deposit Insurance v. MeyerSupreme Court of the United States · 1994
- John Kelley Co. v. CommissionerSupreme Court of the United States · 1946
- HCSC-Laundry v. United StatesSupreme Court of the United States · 1981
- Schaefer v. CommissionerUnited States Tax Court · 1995
- Hillman v. CommissionerUnited States Tax Court · 2000
2 more not listed; retrieve them via the Exa API.
3Cited by2 opinions
- Howard v. More v. CommissionerUnited States Tax Court · 2000
- More v. CommissionerUnited States Tax Court · 2000