- 10 - OPINION I. Introduction A. Issue We must determine whether petitioners have any alternative minimum tax liability on account of their payment, and deduction, of the legal fees. B. Petitioners’ Argument Petitioners argue as follows: They erroneously reported the legal fees as a miscellaneous itemized deduction from adjusted gross income on the original return. Of the settlement payment, $600,000 was intended by Nomura as reimbursement of petitioner’s legal expenses. That amount was paid to him pursuant to Nomura’s bylaws, Article XIII. Article XIII constitutes “a reimbursement or other expense allowance arrangement”, as that term is used in section 62(a)(2)(A) (without distinction, a reimbursement arrangement). The legal fees (the $215,354 expended in 1997) were, therefore, deductible from gross income in the determination of adjusted gross income pursuant to that section. As a so-called “above the line” deduction, such legal fees were not subject to “add back” in the determination of alternative minimum taxable income. See sec. 56(b).Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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