107 T.C. No. 3
UNITED STATES TAX COURT
IVAN A. JASKO AND JUDITH L. JASKO, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 5553-95. Filed August 20, 1996.
Ps' principal residence was destroyed by fire.
They recovered insurance proceeds based on replacement
cost, resulting in a gain. Ps incurred legal fees in
obtaining recovery of those proceeds and claimed a
deduction for the amount of those fees paid during the
taxable year. Ps assert that the insurance policy was
held for the production of income so that the deduction
is allowable under sec. 212(1), I.R.C. Held, under the
origin of claim doctrine, Ps' residence was the source
of their gain and the legal fees represented capital
expenditures constituting a reduction in their gain and
not currently deductible under sec. 212(1), I.R.C.
L. Randolph Harris, for petitioners.
Allan D. Hill, for respondent.
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