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Respondent argues that the deductibility of the legal fees
is governed by section 263. Section 263 disallows deductions for
capital expenditures. Legal expenses paid to defend or perfect
title to property are capital expenditures and are not currently
deductible. Woodward v. Commissioner, 397 U.S. 572, 575-576
(1970); Boagni v. Commissioner, 59 T.C. 708, 711-712 (1973).
We must look to the origin of the claim to decide whether
the legal fees paid by petitioner are currently deductible.
Woodward v. Commissioner, supra at 577-578. The origin-of-the-
claim test requires us to examine the "origin" and "character" of
the legal claim rather than the taxpayer's subjective purpose in
filing the lawsuit. Id.; United States v. Gilmore, 372 U.S. 39,
49 (1963). In Gilmore the Supreme Court said:
the origin and character of the claim with respect to
which an expense was incurred, rather than its
potential consequences upon the fortunes of the
taxpayer, is the controlling basic test of whether the
expense was "business" or "personal" and hence whether
it is deductible or not * * * [United States v.
Gilmore, supra at 49].
The origin of the claim is identified by analyzing all of the
facts and circumstances surrounding the litigation. Id. at 47-
48. If the origin of the claim involves the defense or
protection of title to property, the legal fees are nondeductible
capital expenditures. Brown v. United States, 526 F.2d 135, 138-
139 (6th Cir. 1975); Boagni v. Commissioner, supra at 713. The
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