Robert G. Leslie and Marilyn B. Leslie - Page 31

                                       - 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:                                 

               Cancellation fees                       $15,518                        
               Gold futures contract cost              8,750                          
               Offset fees                             420                            
               Investment advisory fees                14,000                         
               Legal fees investment related           3,500                          
               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            

Page:  Previous  17  18  19  20  21  22  23  24  25  26  27  28  29  30  31  32  33  34  35  36  Next

Last modified: May 25, 2011