Gerdau Macsteel, Inc. v. Comr. 139 T.C. No. 5 (2012)

(I.R.C. Sec. 351 tax-free exchange case; court denied short-term capital loss deduction on sale of stock; affiliated group transaction deemed to lack economic substance; stock was determined to be non-qualified preferred stock under I.R.C. Sec. 351(g) due to lack of participation in corporate growth which meant that transaction failed to qualify as I.R.C. Sec. 351 exchange resulting in inability to deduct capital loss; taxpayer not liable for 40% gross valuation misstatement penalty, but 20% accuracy-related penalty applicable).