- 8 - Commissioner, 89 T.C. 986, 993-994 (1987) (even if a taxpayer has a profit objective, the investment is not recognized for tax purposes if the transaction lacks economic substance). Petitioners have not shown that this case is different from Mahoney or Cherin; that is, petitioners have not argued or shown that the Century transaction had economic substance. Petitioners do not dispute respondent's determination that the Century transaction was a sham. We conclude that the Century investment program was an economic sham and that it should be disregarded for Federal income tax purposes. Pasternak v. Commissioner, 990 F.2d 893, 898 (6th Cir. 1993), affg. Donahue v. Commissioner, T.C. Memo. 1991-181; Illes v. Commissioner, 982 F.2d 163, 166 (6th Cir. 1992) ("If the transaction lacks economic substance, then the deduction must be disallowed without regard to the 'niceties' of the taxpayer's intent"), affg. T.C. Memo. 1991-449. Therefore, petitioners may not deduct their cash investment. In view of our conclusion, we need not decide whether petitioners invested in the Century program with a profit objective or whether their investment was tax motivated. Petitioners claim that they may deduct their cash investment in Century because Century took their cash contributions fraudulently. Petitioners have not shown that Century acted with criminal intent to deprive them of their cash contributions. Thus, no theft loss deduction is allowable. Nor may petitionersPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
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