Robert Joseph Looby and M. Patricia Looby - Page 6

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               On October 13, 1993, the Surrogate's Court issued its                  
          decree9 in the matter of the accounting for the estate, finding             
          some issues in favor of and some against petitioner.  The decree            
          further held that petitioner's efforts had benefited the estate             
          and that she should be reimbursed by the estate for legal fees              
          and litigation expenses paid to her attorneys in the amount of              
          $31,141.10                                                                  
               The parties agree that petitioners incurred the $4,855 in              
          legal fees claimed on their 1990 return, $17,144 of the                     
          $17,468.01 claimed on their 1991 return and $10,577.30 in legal             
          fees for 1992 although they deducted but $7,444 on their return             
          for the year.                                                               
                                     Discussion                                       
               We must decide whether the legal fees incurred by                      
          petitioners in the years 1990 through 1992 are deductible under             
          section 212, which provides:                                                
                    In the case of an individual, there shall be                      
               allowed as a deduction all the ordinary and necessary                  
               expenses paid or incurred during the taxable year--                    
                    (1) for the production or collection of income;                   
                    (2) for the management, conservation or maintenance of            
               property held for the production of income; or                         



          9Affd. sub nom. In the Matter of Mary Doris Casey, 634                      
          N.Y.S.2d 396 (N.Y. App. Div. 1995).                                         
          10This amount encompasses the $29,915.07 deducted on                        
          petitioners' return for the years 1990, 1991, and 1992.                     




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