The Fifth Circuit affirmed the decision of the District Court (Northern District of Texas) denying the tax losses of Texas banker D. Andrew Beal. The Court of Appeals affirmed the lower court’s finding that the partnership through which the losses were generated was a sham and that the losses should be disallowed. However, the Circuit Court also affirmed the trial court’s determination that penalties should not be allowed.
Read the opinion here:
Southgate Master Fund v. US.