Long-Term Capital Holdings v. United States

Long Term Capital Holdings, et al. v. United States was a court case argued before the United States District Court for the District of Connecticut that concerned a tax shelter used by Long-Term Capital Management, a failed hedge fund.

The tax shelter had been designed by Babcock & Brown for Long-Term Capital to shelter their short-term trading gains from 1997.

The case was an appeal of an Internal Revenue Service denial of the plaintiffs' claim of $106,058,228 in capital losses during the 1997 tax year, and associated penalties. After a bench trial, Judge Janet Bond Arterton ruled on August 27, 2004 that the transactions employed by Long-Term Capital Holdings did not have economic substance, and were disregarded for tax purposes.

External links

• Findings and Opinion in Long Term Capital Holdings v. United States, from the United States Department of Justice
• A Tax Shelter, Deconstructed, a New York Times article about the case