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business expenses, see Guill v. Commissioner, 112 T.C. 325
(1999), we have denied petitioner’s pension contribution
deduction on the ground that the recovery in her settlement of
the State Farm class action lawsuit did not constitute earned
income from services actually rendered by her in conducting a
Schedule C business. There was no nexus between the recovery and
the rendering of any personal services by petitioner to the
payor. The nexus was different; the recovery was connected to,
had its origin in, and arose out of State Farm’s invidious
discrimination, which deprived her of the opportunity to perform
any such services.
Our denial of petitioner’s claim to a pension plan
contribution deduction on that ground forecloses her claim that
she is entitled to an above-the-line Schedule C deduction for
legal fees, rather than the itemized deduction subject to the 2-
percent limitation of section 67 that respondent allowed in the
statutory notice.
To give effect to all the foregoing,
Decision will be entered for
respondent.
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