Harry D. Bledsoe and Annie L. Bledsoe - Page 12

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            We must decide whether any of the claimed legal expenses which                              
            petitioners deducted were attributable to Resthaven's cemetery                              
            business and, therefore, deductible under either section 162 or                             
            212.                                                                                        
                  In United States v. Gilmore, 372 U.S. 39, 49 (1963), the                              
            Supreme Court held that the proper time for characterizing an                               
            expense as either "business" or "personal" is when the expense is                           
            incurred.  The U.S. Court of Appeals for the Tenth Circuit, based                           
            on the Supreme Court's holding, formulated the "origin of the                               
            claim" test.  That test must be separately applied to the divided                           
            parts:  the divorce action and the action in which the                                      
            corporation was a party.  Dolese v. United States, 605 F.2d 1146,                           
            1151 (10th Cir. 1979).  Hence, we must decide the origin of the                             
            expenditures as they apply to petitioners and to Resthaven.                                 
            Wallace v. Commissioner, 56 T.C. 624, 632 (1971).                                           
                  This Court has held that, when appropriate, litigation                                
            expenses should be allocated between personal and business costs.                           
            Michaels v. Commissioner, 12 T.C. 17 (1949).  "Such an allocation                           
            between deductible and non-deductible expenses is not unusual, *                            
            * * although 'a rough approximation is all that can be                                      
            expected.'"  Burch v. United States, 698 F.2d 575, 579-580 (2d                              
            Cir. 1983) (quoting Ditmars v. Commissioner, 302 F.2d 481, 488                              
            (2d Cir. 1962), revg. and remanding T.C. Memo. 1961-105).                                   







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