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“overriding concern in the divorce litigation was to protect * *
* [certain] assets against the claim of his wife.” Ibid. The
assets were controlling stock interests in certain corporations,
the dividends and salaries from which amounted to substantially
all of the taxpayer’s income. Ibid. The taxpayer won a complete
victory in his divorce case. Id. at 42. The Court of Claims
allocated 80 percent of the taxpayer’s legal expenses to the
taxpayer’s focus on protecting his assets and 20 percent to all
other aspects of the divorce litigation, and allowed deductions
for the 80 percent under sections 23(a)(2), I.R.C. 1939, and
212(2), ruling that deductions for the remaining 20 percent were
barred by sections 24(a)(1), I.R.C. 1939, and 262. See id. at
40, 43. In United States v. Gilmore, 372 U.S. at 49, the Supreme
Court described its conclusion as to the legal standard to be
used in analyzing such situations:
we resolve the conflict among the lower courts on the
question before us * * * in favor of the view that the
origin and character of the claim with respect to which an
expense was incurred, rather than its potential consequences
upon the fortunes of the taxpayer, is the controlling basic
test of whether the expense was “business” or “personal” and
hence whether it is deductible or not under � 23(a)(2). * *
* [Emphasis added.]
Although in Gilmore the taxpayer’s focus was (and, according
to the Court of Claims, 80 percent of his expenditures were
spent) on protecting the assets that clearly were the source of
substantially all of his income, the Supreme Court directed its
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