Court of Appeals for the Ninth Circuit May 15, 1981, 79-7066 (Walter W. Cruttenden and Fay T. Cruttenden v. Commissioner of Internal Revenue)

NELSON, Circuit Judge:

In this appeal we confront the ambivalent tax characteristics of a practice in the stock brokerage industry: the borrowing of securities by a brokerage firm under a subordination agreement that allows the firm to use the securities to meet its net capital requirements under stock exchange rules.