Krumhorn v. Comm'r
United States Tax Court
P, a commodities dealer, deducted losses in 1978 from straddle transactions purportedly executed on London commodities exchanges. Held, P's purported losses from straddle transactions are not deductible pursuant to the Deficit Reduction Act of 1984, Pub. L. 98-369, sec. 108(b), 98 Stat. 494, as amended by sec. 1808(d), Tax Reform Act of 1986, Pub.
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P, a commodities dealer, deducted losses in 1978 from straddle transactions purportedly executed on London commodities exchanges. Held, P's purported losses from straddle transactions are not deductible pursuant to the Deficit Reduction Act of 1984, Pub. L. 98-369, sec. 108(b), 98 Stat. 494, as amended by sec. 1808(d), Tax Reform Act of 1986, Pub. L. 99-514, 100 Stat. 2085, 2817, or sec. 165(c), I.R.C., because Ps failed to establish that the transactions actually occurred or had economic substance. Held, further, Ps are liable for an addition to tax under sec. 6653(a), I.R.C.
1Opinion of the Court
Ruwe, Judge:
Respondent determined deficiencies in petitioners’ 1978 and 1979 Federal income taxes in the respective amounts of $2,801,888 and $186,585, plus an addition to tax for the taxable year 1978 in the amount of $140,094, pursuant to section 6653(a).1
After concessions, the issues for decision are: (1) Whether petitioners properly deducted capital losses from purported commodities transactions on their 1978 joint Federal income tax return, and (2) whether petitioners are liable for the addition to tax as determined by respondent.2
FINDINGS OF FACT
Some of the facts have been stipulated…
2Cases cited45 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Gregory v. HelveringSupreme Court of the United States · 1935
- Jack E. Golsen and Sylvia H. Golsen v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1971
- Freytag v. CommissionerSupreme Court of the United States · 1991
- Freytag v. CommissionerUnited States Tax Court · 1987
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3Cited by13 opinions
- Compaq Computer Corp. v. CommissionerUnited States Tax Court · 1999
- Keeler v. CommissionerCourt of Appeals for the Tenth Circuit · 2001
- Internal Revenue Service v. CM Holdings, Inc. (In Re CM Holdings, Inc.)District Court, D. Delaware · 2000
- CNT Investors, LLC v. Comm'rUnited States Tax Court · 2015
- National Life Insurance Company and Subsidiaries v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1996
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