Jean W. Lange and Jeanne P. Lange - Page 12

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               The litigation arose because petitioner caused Madison to              
          issue additional shares of stock to himself, and he attempted to            
          have Madison redeem shares of stock from Elmer's heirs.  Peti-              
          tioner, in his counterclaim, sought to enforce an agreement to              
          purchase 600 shares from Elmer's estate in order to equalize the            
          stock ownership as between the families.  The claims have their             
          origin in the protection, defense, and acquisition of peti-                 
          tioner's ownership interest in Madison stock.  While petitioner's           
          purpose in undertaking the litigation might have included                   
          protecting his job, this is not determinative under the origin-             
          of-the-claim test.  See Bradford v. Commissioner, 70 T.C. 584,              
          591 (1978); see also Mitchell v. Commissioner, T.C. Memo. 1994-             
          237 (and cases cited therein), affd. 73 F.3d 628 (6th Cir. 1996).           
          Petitioner, through litigation, sought to establish his ownership           
          of additional shares of Madison stock.  We conclude that the                
          litigation costs were incurred to defend, protect, and acquire              
          petitioner's title to the Madison stock and therefore constitute            
          nondeductible capital expenditures which should be added to the             
          basis of petitioner's Madison stock.  See Galewitz v. Commis-               
          sioner, 411 F.2d 1374 (2d Cir. 1969), revg. 50 T.C. 104 (1968);             
          Lin v. Commissioner, T.C. Memo. 1984-581.  Accordingly, we                  
          sustain respondent's determination in the notice of deficiency.             
               To reflect the foregoing,                                              

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