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respondent contends that, under the “‘origin of the claim’ test”,
the Objections did “not constitute the relevant litigation”, but
that--
The relevant litigation is that which was initiated by
those persons who opposed petitioner’s Objections to
the Third Account and who prosecuted both a motion for
monetary sanctions and a petition to charge
petitioner’s share of the trust’s income with the
payment of such monetary sanctions.
In addition, respondent contends that the California Court--
determined that the underlying reasons for petitioner’s
objections to the trustee’s accounting were vindictive,
intended as punishment, initiated in bad faith, and
based on petitioner’s animosity with respect to the law
firm representing the trustee.
Respondent concludes from this that section 262 prohibits
deductions for petitioner’s Payments. In the alternative,
respondent states that if the payments meet the “ordinary and
necessary requirement” of section 212, then they are nevertheless
not deductible because petitioner failed to carry her burden of
allocating the payments between deductible and nondeductible
portions.
Petitioner responds that (1) she had to make the payments in
order to receive income from the Trust, thus meeting the
“ordinary and necessary” requirement; (2) the origin of the claim
is petitioner’s filing of the Objections, an income-focused act
that does not fall under section 262; and (3) the entire
obligation to make the Payments arose from the one document-–the
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