Floyd Eugene Swartz, Jr. v. Commissioner of Internal Revenue

The dispositive issue in this case is whether certain gold and silver commodity futures contracts bought and sold by taxpayer Floyd E. Swartz, Jr. constituted capital assets under section 1221 of the Internal Revenue Code. 1 The Tax Court 2 held that losses stemming from these contracts were capital losses, which could not be deducted from ordinary income to eliminate tax liability. We affirm.

From December 1980 to December 1983, Swartz worked full-time trading commodity futures contracts. He made his transactions through brokerage houses, and had no direct contacts with other buyers and…