T.C. Memo. 2000-120
UNITED STATES TAX COURT
SHARON PURCELL DILEONARDO, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 5508-97. Filed April 5, 2000.
P is a one-sixth income beneficiary of a trust. In
State court, P filed objections to an accounting by the
trustee. The State court (1) ruled against P, (2) required
P to compensate the trustee, the other beneficiaries, and a
guardian ad litem for their expenses in dealing with P’s
objections, and (3) directed the trustee to use P’s share of
the trust distributions to accomplish this compensation. P
reported as income her share of the trust’s income and
deducted the court-ordered payments.
Held: The origin and character of the claim resulting
in P’s payments was the trustee’s filing of an accounting,
proposing a distribution, and acknowledging that an argument
could be made for a different apportionment of the proposed
distribution; P’s payments are deductible under sec. 212(1)
and (2), I.R.C. 1986.
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