- 21 - at 51-52. The "origin of the claim" test is likewise used to determine whether litigation expenses are to be classified as ordinary or capital. Woodward v. Commissioner, 397 U.S. 572 (1970); United States v. Hilton Hotels Corp., 397 U.S. 580 (1970). Application of the "origin of the claim" test requires an examination of all the facts and circumstances and focuses on the "kind of transaction" from which the litigation stems. Boagni v. Commissioner, 59 T.C. 708, 713 (1973). b. Personal versus Business Expense The lawsuit in which the legal expenses were incurred was brought by William against petitioner, Lakeview, and Lakeview's attorney7 because William believed he had been cheated in the Redemption Agreement and wanted to get back his Lakeview stock and the management role that such ownership entailed, as well as his interest in the Fence Property. William believed that petitioner and the corporate attorney had taken advantage of his diminished capacity, caused by a serious heart ailment and emotional distress, to pressure him into the buyout against his best interests and at an unconscionable price. William further alleged that he had been improperly pressured into entering the Redemption Agreement due to petitioner's tantrums designed to frustrate business decision-making or to embarrass him in front 7 The legal expenses incurred by Lakeview's corporate attorney in defending against William's lawsuit were not paid by Lakeview and are not at issue in this case.Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Next
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