- 20 -20
F.2d 431, 433 (5th Cir. 1982). Consequently, based on Mrs.
Marcus' credible testimony, and bearing heavily against her, we
find that she received $25,000 in lieu of her inheritance.
Therefore, we hold that $25,000 of the amount received pursuant
to the agreement is tax free under section 102, and $12,898 is a
taxable capital gain in 1990.
Attorney's Fees
Respondent disallowed $3,744 of attorney's fees for failure
of petitioners to substantiate them with canceled checks.8 All
of the disallowed amount is attributable to alleged payments to
John DiCaro. At trial, Mr. Marcus testified that he could not
find the checks showing payment to DiCaro because the checks were
lost when he closed up his medical practice.
Petitioners' burden of proving that respondent's
determinations in her deficiency notice are erroneous includes
the burden of substantiation. See Hradesky v. Commissioner, 65
T.C. 87, 89-90 (1975), affd. per curiam 540 F.2d 821 (5th Cir.
1976). Deductions are a matter of legislative grace; petitioners
have the burden of showing that they are entitled to any
deduction claimed. New Colonial Ice Co. v. Helvering, 292 U.S.
435, 440 (1934). Section 6001 requires taxpayers to maintain
8 Petitioners' position at trial was that they paid DiCaro
$8,993 in 1990, and they are seeking to deduct the entire
payment.
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