- 31 -
arguments to the contrary, were primarily to obtain substantial
tax benefits. As we stated in Ewing:
"we are cognizant of the fact that tax planning is an
economic reality in the business world and the effect
of tax laws on a transaction is routinely considered
along with other factors, but nevertheless we reiterate
that 'tax straddling * * * transactions can hardly be
said to number among congressionally approved, sanc-
tioned, or encouraged responses to the tax laws."
Ewing v. Commissioner, 91 T.C. at 420 (quoting Fox v. Commis-
sioner, supra at 1025).
Fees Paid With Respect to Straddles
Petitioners deducted the following fees paid to Hunter in
regard to petitioner's Hunter transactions:
1980
Cancellation fees $15,518
Gold futures contract cost 8,750
Offset fees 420
Investment advisory fees 14,000
Legal fees investment related 3,500
1981
Cancellation fees 102
Offset fees 20
Petitioners contend that these fees were incurred in
connection with the purchase and sale of capital assets. As
such, petitioners argue that these fees are capitalized and form
part of the cost basis (for purchase commissions) and an offset
against the selling price (for disposition commissions). Peti-
tioners cite section 1.263(a)-2(e), Income Tax Regs., and the
cases of Spreckles v. Helvering, 315 U.S. 626 (1942), and Soeder
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