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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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