26
adversary proceeding had their origin in petitioner's conduct as
an employee and investor-shareholder of Northeast and thus
related to activities engaged in by petitioner to produce income.
Secs. 162, 212(1). We hold that petitioners may deduct their
legal fees in 1986, 1987, and 1988 relating to petitioner's
Northeast litigation and adversary proceeding subject to the
limits of section 67.
Decision will be entered
under Rule 155.
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