Lance R. and Elaine C. LeFleur - Page 27

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            salary, in order to entice petitioner to continue his employment                          
            with BERC pending its sale.                                                               
                  We find that petitioners have failed to meet their burden of                        
            proving that petitioner was anything other than an employee of                            
            BERC.  Rule 142(a).  Consequently, no amount of petitioner's                              
            recovery is allocable to business gross receipts.  On that basis,                         
            we hold that petitioners must itemize their related deduction for                         
            legal fees and costs on Schedule A rather than deduct their                               
            expenses on Schedule C.                                                                   
                  Section 67(a) imposes a 2-percent floor on the miscellaneous                        
            itemized deductions of individuals for all taxable years                                  
            beginning after December 31, 1986.  Miscellaneous itemized                                
            deductions are defined in section 67(b) as those itemized                                 
            deductions that are not specifically enumerated in section 67(b).                         
            As section 162 itemized deductions are not included in section                            
            67(b), they are limited by the 2-percent floor.  Sec. 1.67-                               
            1T(a)(1)(i), Temporary Income Tax Regs., 53 Fed. Reg. 9875 (Mar.                          
            28, 1988).  Accordingly, we further hold that petitioners'                                
            deduction for legal fees and costs is circumscribed by the 2-                             
            percent floor under section 67(a).  In addition, since                                    
            petitioners' AGI was over $100,000 for the taxable year ended                             
            December 31, 1991, the amount of miscellaneous itemized                                   
            deductions that they may claim is subject to the provisions of                            
            section 68.                                                                               

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