- 14 - part of the proceedings. Accordingly, we find that the part of these proceedings in which Resthaven had an interest originated with respect to Resthaven. After examining the evidence and analyzing the breakdown of the legal fees, we hold that, in 1987 and 1988, 35 percent of the amount disallowed by respondent was, in fact, incurred to maintain the property held by Resthaven and is deductible.3 See sec. 212; Burch v. United States, supra. Section 1244 Stock Ordinary loss treatment is available to those individuals with "section 1244 stock" in a corporation with total equity of $1 million or less. The section 1244 stock must have been originally issued to them for money or property by a domestic small business corporation. Sec. 1244(a), (c). Section 1244 stock loss deductions cannot exceed $50,000 (or $100,000 if a joint return was filed) per annum. Sec. 1244(b). For 1988 and 1989, petitioners claimed section 1244 losses on their Diamond stock. Petitioners assert that they were entitled to an ordinary loss deduction of $196,503, the amount of their claimed basis in Diamond. Due to the section 1244 3 We note that $600.75 of the fees paid to Carpenter, Hein, Carpenter was paid in 1989, but has not been placed in issue for 1989.Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Next
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