Ivor F. and Debra A. Benci-Woodward, et al. - Page 3

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                                 Docket No. 4185-96                                   
                                    (the Mangums)                                     
                         Year                     Deficiency                          
                         1992                     $314,873                            
                                 Docket No. 8265-96                                   
                                   (the Ragatzes)                                     
                         Year                     Deficiency                          
                         1992                     $316,965                            
               Unless otherwise indicated, all section references are to              
          sections of the Internal Revenue Code in effect for the year in             
          issue.  All Rule references are to the Tax Court Rules of                   
          Practice and Procedure.  All dollar amounts are rounded to the              
          nearest dollar.                                                             
               After concessions by petitioners, the issues remaining for             
          decision are:  (1) Whether legal expenses attributable to                   
          petitioners' receipt of punitive damages constitute miscellaneous           
          itemized deductions within the meaning of section 67(b); if so,             
          (2) whether such deductions are subject to disallowance for                 
          purposes of computing petitioners' alternative minimum tax (AMT)            
          liability; and (3) whether attorney's fees and costs may be                 
          excluded from gross income under the facts of this case.                    
               These cases were submitted fully stipulated.  The                      
          petitioners resided in California at the time they filed their              
          petitions.                                                                  









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