August 19, 2022, 8:34 p.m
A tech company founder seeking a $77 million deduction on capital gains losses that the IRS determined were part of a tax avoidance scheme lost his challenge to a Tax Court ruling upholding the denial.
In 2001, Raghunathan Sarma, one of the founders of computer hardware company American Megatrends, participated in a complex tax avoidance scheme known as “Family Office Custom Partnership” or “FOCus” in order to avoid paying of taxes on $80 million capital. the profits realized from the sale of a division of his company.
The scheme, marketed to wealthy individuals, involved the creation of a set of tiered partnerships which…