T.C. Memo. 1998-395
UNITED STATES TAX COURT
IVOR F. AND DEBRA A. BENCI-WOODWARD, ET AL.,1 Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 3769-96, 4185-96, Filed November 9, 1998.
8265-96.
In these consolidated cases, R determined
deficiencies in Ps' Federal income taxes for their 1992
taxable year due to their failure to include in gross
income certain punitive damages and interest arising
out of a State court lawsuit. (Ps now concede that all
amounts received as punitive damages, plus interest,
are includable in gross income as determined by R. See
O'Gilvie v. United States, 519 U.S. 79 (1996).) R
allowed Ps miscellaneous itemized deductions for legal
fees and costs attributable to their punitive damages
awards pursuant to sec. 67, I.R.C. However, in
computing Ps' alternative minimum tax (AMT)
adjustments, R disallowed their miscellaneous itemized
deductions pursuant to sec. 56(b)(1)(A)(i), I.R.C.
1 Cases of the following petitioners are consolidated
herewith: Laurentz J. and Barbara Mangum, docket No. 4185-96,
and Jose and Dianne M. Ragatz, docket No. 8265-96.
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