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Objections–-“and therefore all fees arose from the litigation and
are deductible.”
We agree with petitioner’s conclusions and part of
petitioner’s analysis.
Section 2124 allows a deduction for expenses to produce or
collect income or to manage, etc., property held for the
production of income.
Section 212 is coextensive in most respects with section
162(a), and taxpayers may not deduct expenses under section 212
that could not be deducted under section 162(a) were the expenses
connected to a trade or business. See Trust of Bingham v.
Commissioner, 325 U.S. 365, 373-376 (1945) (discussing the
predecessors of secs. 212 and 162(a)); Guill v. Commissioner, 112
T.C. 325, 328 (1999). As we have noted:
“[E]xcept for the requirement of being incurred in
connection with a trade or business,” however, a deduction
under section 212 “is subject * * * to all the restrictions
and limitations that apply in the case of the deduction
4 Sec. 212 provides, in pertinent part, as follows:
SEC. 212. EXPENSES FOR PRODUCTION OF INCOME.
In the case of an individual, there shall be allowed as
a deduction all the ordinary and necessary expenses paid or
incurred during the taxable year--
(1) for the production or collection of income;
(2) for the management, conservation, or
maintenance of property held for the production of
income; * * *
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