context: It is clear that transactions whose sole function is to produce tax deductions are substantive shams, regardless of the motive of the taxpayer.
citation_a.signal: cf.
citation_a.identifier: 98 S.Ct. 1291, 1303-04
citation_a.parenthetical: where "there is a ... transaction ... encouraged by business or regulatory realities, ... imbued with tax-independent considerations, and ... not shaped solely by tax-avoidance features," the transaction is not a sham
citation_a.sentence: See Mahoney, 808 F.2d at 1220 (inquiry is whether transaction has any practical economic effects beyond the creation of tax benefits); Boynton, 649 F.2d at 1172 (transactions that have no economic effect other than creation of tax losses are shams); Tolwinsky v. Commissioner, 86 T.C. 1009, 1037 (1986) (“[wjhere transactions serve no ‘purpose, substance, or utility apart from their anticipated tax consequences’ they are disregarded for tax purposes”); Julien v. Commissioner, 82 T.C. 492 (1984) (interest expenses incurred in silver straddles disallowed under I.R.C. § 162(a) because transactions served no economic purpose beyond generating interest deductions); cf. Frank Lyon Co. v. United States, 435 U.S. 561, 583-84, 98 S.Ct. 1291, 1303-04, 55 L.Ed.2d 550 (1978) (where “there is a ... transaction ... encouraged by business or regulatory realities, ... imbued with tax-independent considerations, and ... not shaped solely by tax-avoidance features,” the transaction is not a sham).
citation_b.signal: see
citation_b.identifier: 86 T.C. 1009, 1037
citation_b.parenthetical: "[wjhere transactions serve no 'purpose, substance, or utility apart from their anticipated tax consequences' they are disregarded for tax purposes"
citation_b.sentence: See Mahoney, 808 F.2d at 1220 (inquiry is whether transaction has any practical economic effects beyond the creation of tax benefits); Boynton, 649 F.2d at 1172 (transactions that have no economic effect other than creation of tax losses are shams); Tolwinsky v. Commissioner, 86 T.C. 1009, 1037 (1986) (“[wjhere transactions serve no ‘purpose, substance, or utility apart from their anticipated tax consequences’ they are disregarded for tax purposes”); Julien v. Commissioner, 82 T.C. 492 (1984) (interest expenses incurred in silver straddles disallowed under I.R.C. § 162(a) because transactions served no economic purpose beyond generating interest deductions); cf. Frank Lyon Co. v. United States, 435 U.S. 561, 583-84, 98 S.Ct. 1291, 1303-04, 55 L.Ed.2d 550 (1978) (where “there is a ... transaction ... encouraged by business or regulatory realities, ... imbued with tax-independent considerations, and ... not shaped solely by tax-avoidance features,” the transaction is not a sham).