Louis Brandeis

“ Such profit or loss, he now suggests, must be computed 'by taking the difference between the purchase price and the sales price of shares bought and sold during the year, deducting expenses, such as commissions, taxes and interest.' Thus computed, he concludes, his market operations resulted in a gross income of $43,692; and adding his salary, insurance commissions and dividends, and deducting the expenses of his stock operations (interest paid brokers) his net taxable income was $39,682, and his total tax $1,897.77. ”

“ Upon rises in the market, paper profits had been used to increase his holdings. Upon declines in the market, when his margin fell below the required percentage, the brokers reduced his debit balances by sufficient sales to make up the deficiency in the margin. The purchases and sales were effected by the brokers transferring so-called 'street certificates,' each for 100 shares, in the name of some stock exchange concern, endorsed by it in blank. At no time was any stock certificate delivered by the brokers to Snyder, or by him to them ”

“ Moreover, Snyder suggests no other practicable method of accounting which would reflect income for the year more fairly than the method adopted by the Commissioner. [5] He concedes that he is not a dealer in securities, in the sense of one who buys securities for the purpose of resale to customers; and that consequently, he is not entitled to compute income on an inventory basis. ”

“ A dealer is defined as a 'merchant of securities, * * * with an established place of business, regularly engaged in the purchase of securities and their resale to customers.' Compare Harriman National Bank v. ”

“ And obviously, whether or not the stock transactions constituted a trade or business, the computation of gross income therefrom by deducting from sales of the current year the cost of securities sold, as determined by the purchase prices of previous years, is not comparable to the unsuccessful attempt in Burnet v. ”

“ See Spring City Foundry Co. v. Commissioner of Internal Revenue, 292 U.S. 182, 185, 54 S.Ct. 644, 78 L.Ed. 1200; compare Washington Land Co. v. Com'r of Internal Revenue, 10 B.T.A. 503; Atlantic Coast Realty Co. ”