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expenditures under section 263.3 We hold that the professional
fees at issue were capital expenditures under section 263.
FINDINGS OF FACT
Most of the relevant facts have been stipulated and are so
found.4 The stipulation of facts and supplemental stipulation of
facts are incorporated herein by this reference.
Petitioner resided in Gracemont, Oklahoma, at the time the
petition in this case was filed.
On January 18, 1990, petitioner's husband, S.G. "Red"
Stevens (Mr. Stevens), as grantor, executed a Trust Agreement
establishing a revocable inter vivos trust (the Trust) under the
laws of the State of Oklahoma and designating Mr. Stevens as
Trustee. Mr. Stevens’ property was transferred to, and
thereafter owned by, the Trust.
Pursuant to the terms of the Trust Agreement, all Trust
income was either distributed to Mr. Stevens or added to the
principal of the Trust during his lifetime. For Federal income
tax purposes, the Trust was classified as a grantor trust.
3All section references are to the Internal Revenue Code as
in effect for the taxable years at issue, and all Rule references
are to the Tax Court Rules of Practice and Procedure. Monetary
amounts are rounded to the nearest dollar.
4Our findings include a correction of a typographical error
in par. 28 of the stipulation of facts; i.e., "1994" is changed
to "1993".
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