- 22 -
circumstances." Marcello v. Commissioner, 380 F.2d 499, 506 (5th
Cir. 1967), affg. in part and remanding in part 43 T.C. 168
(1964) and T.C. Memo. 1964-299.
Regarding the section 1244 loss and loss carryover
petitioners claimed for 1988 and 1989, respectively, the evidence
produced was insufficient for us to conclude that they had paid
more than $7,500 for their section 1244 stock. Petitioners'
argument that the subsequent payments were in exchange for
section 1244 stock may be a plausible one but is an untested
concept. Petitioners had met the other requirements of section
1244 but failed solely because the subsequent payments could not
be factually linked to the 7,500 shares of section 1244 stock
issued in 1987. Consequently, we find that petitioners were not
negligent with respect to their section 1244 loss deduction.
Respondent disallowed legal fees in 1987 and 1988, asserting
that these were personal expenses of petitioners rather than
business expenses of Resthaven. We have found that 35 percent of
the disallowed expenses were, in fact, incurred by Resthaven in
the ordinary course of its cemetery business. However, our
determination required that we make a reasonable estimate, as
petitioners' records were quite difficult to analyze in this
case. With respect to the disallowed portion of legal fees which
we sustain and regarding the other disallowed items conceded by
Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NextLast modified: May 25, 2011