The US Court of Appeals for the Tenth Circuit has disallowed capital loss deductions from a transaction that lacked economic substance (Scott A. Blum; Audrey R. Blum v. Commissioner of Internal Revenue, No. 12-9005, 18 December 2013). The case involved a US taxpayer who entered into a tax shelter transaction called the OPIS (Offshore Portfolio Investment Strategy) transaction. The OPIS transaction was a basis-shifting scheme that was designed to create artificial losses by allowing taxpayers to claim a large tax basis in certain assets. The taxpayers invested USD 6 million in the OPIS transaction, which then generated a capital loss...