The Tax Court shot down another Jenkens and Gilchrist/Paul Daugerdas basis-shifting shelter yesterday. The defeat was pretty much total, with the $10 million claimed loss disallowed and a $1,298,284 penalty imposed.
The “Basis Leveraged Investment Swap Spread,” or BLISS, shelter, involving offsetting option positions, may have lacked economic substance, but it left behind a great theme song:
Cite: New Phoenix Sunrise Corp, 132 T.C. No. 9
Tags: Alice Peacock, Jenkens & Gilchrist, Paul Daugerdas, tax shelters
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Yay! Go IRS!