12 Neither Northeast nor Sigma did business in 1988. Petitioner worked in the paper and printing business before and after these cases were settled. 4. Petitioners' Legal Fees and Federal Income Tax Returns a. 1986 Petitioner paid legal fees of $10,243 relating to the Northeast litigation and the adversary proceeding. Petitioners deducted those fees on the Schedule C for petitioners' paper and printing business filed with their 1986 Federal income tax return. They reported no gross receipts and claimed a net loss of $10,243 on Schedule C. b. 1987 Petitioner paid legal fees in 1987 of $34,083 for the Northeast litigation and $25,269 for the bankruptcy proceedings. The bankruptcy legal fees included fees for: A conference held by the attorneys with Mrs. Scofield, the attendance by attorneys at a deposition of Mrs. Scofield, compilation of bankruptcy pleadings and memos, research regarding discharge and pleadings in bankruptcy, attorney-client privilege in bankruptcy, defenses to objection to discharge, fraudulent conveyance/alter ego exposure, and reviewing Judge Lavien's ruling on alter ego and concealment of assets. Petitioners deducted those fees ($59,352) on the Schedule C for petitioner's paper and printing business filed with theirPage: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
Last modified: May 25, 2011