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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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