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may not rely on section 66(b) to deny petitioner the benefit of
community property laws.4
II. Deductions
Deductions are a matter of legislative grace, and the
taxpayer has the burden of showing that such taxpayer is entitled
to any deduction claimed. See Rule 142(a); INDOPCO, Inc. v.
Commissioner, 503 U.S. 79, 84 (1992). Taxpayers must
substantiate amounts claimed as deductions by maintaining the
records necessary to establish such entitlement. Sec. 6001; sec.
1.6001-1(a), Income Tax Regs.; see Hradesky v. Commissioner, 65
T.C. 87 (1975), affd. per curiam 540 F.2d 821 (5th Cir. 1976).
A. Schedule A Deductions
1. Legal Expenses
Petitioner claimed $8,500 in legal fees on the return.
Section 162 allows a deduction for ordinary and necessary
expenses paid or incurred in carrying on a trade or business.
Personal expenses are not deductible. Sec. 262. Generally,
legal fees associated with a divorce proceeding are nondeductible
personal expenses. Melat v. Commissioner, T.C. Memo. 1993-247;
sec. 1.262-1(b)(7), Income Tax Regs.
4 We note that petitioner reported 100 percent of his C.P.A.
business income on the return. Petitioner did not raise this
issue in his petition or at trial; therefore, we do not consider
it before the Court.
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