Eldon R. Kenseth and Susan M. Kenseth - Page 13

                                        - 13 -                                          
          preparing for and conducting their negotiations with APV and its attorneys.   
               Petitioner’s complaint filed with DILHR, his civil complaint             
          with the District Court for the Western District of Wisconsin,                
          and the settlement agreement were signed by Michael R. Fox or                 
          Mary E. Kennelly of Fox & Fox.  Fox & Fox’s office is in Madison,             
          Wisconsin; Mr. Fox and Ms. Kennelly are admitted to practice law              
          in Wisconsin.                                                                 
               Petitioners concede that the proceeds from the settlement                
          are includable in gross income except for the portion of the                  
          settlement used to pay Fox & Fox under the contingent fee                     
          agreement.  Specifically, petitioners argue that they exercised               
          insufficient control over the settlement proceeds used to pay Fox             
          & Fox and should, therefore, not be taxed on amounts to which                 
          they had no “legal” right and could not, and did not, receive.                
          Conversely, respondent argues that (1) the amount petitioners                 
          paid or incurred as attorney’s fees must be included in                       
          petitioners’ gross income and (2) the contingent fee is                       
          deductible as a miscellaneous itemized deduction, subject to the              
          2-percent floor under section 67 and the overall limitation under             
          section 68 and also nondeductible in computing the alternative                
          minimum tax (AMT) under section 56.                                           

Page:  Previous  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  Next

Last modified: May 25, 2011