Partnership's Forex Trades Were Tax Sham, DC Circ. Affirms

Law360 (November 26, 2019, 6:03 PM EST) -- Ample evidence supported a U.S. Tax Court decision that a partnership rigged foreign currency trades with preset exchange rates to generate $144 million in sham tax losses, a District of Columbia Circuit Court panel ruled Tuesday.

Endeavor Partners Fund LLC set the exchange rates ahead of time for the trades, which were conducted in euros and Danish kroner, to even out any loss or gain, the panel said. The set exchange rates removed any element of risk and resulted in transactions with no economic substance, the panel said.

“The Tax Court did not clearly err when it concluded the parties fixed the...

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