- 5 -
(JGP). JGP eventually intervened in the lawsuit between
Utsunomiya and Moomuku and filed a motion to expunge Utsunomiya's
"lis pendens" from the property. JGP also cross filed against
Moomuku and petitioner, alleging the "lis pendens" attached to
the land was contrary to promises, warranties and representations
made at the time of sale.
During the year at issue, petitioner was also engaged in
another lawsuit. This particular action was related to his
position as a general contractor. It appears that the second
lawsuit concerned an alleged breach of contract with respect to
petitioner's general contracting activity.
In the process of defending himself, petitioner retained
various attorneys for representation in the lawsuits.
In addition to disallowing petitioner's claimed Schedule C
expense deduction for legal and professional fees in the amount
of $101,557, respondent, in the notice of deficiency,
recharacterized this expense as a miscellaneous itemized
deduction under Schedule A. Respondent determined that the legal
expenses were not incurred in connection with petitioner's trade
or business.
Respondent also determined that petitioner received payments
during 1991 related to the sale of stocks and bonds that were not
reflected as capital gains or losses in his 1991 return.
Overall, respondent, in the statutory notice of deficiency,
determined that the expenses underlying the denied deductions
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011