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Respondent determined a deficiency in petitioners' 1997
Federal income tax in the amount of $10,257. This Court must
decide whether petitioners are liable for the alternative minimum
tax (AMT) under section 55. Petitioners do not dispute the
computation of the AMT.
Some of the facts in this case have been stipulated and are
so found. Petitioners resided in Evergreen, Colorado, at the
time they filed their petition.
Dorothy Ross (Mrs. Ross) was the beneficiary of two trusts
during the year at issue. The trusts invested only in one mutual
fund and did not invest in rental property or engage in the
operation of a trade or business. A legal dispute arose with
respect to the beneficiaries of the trusts and the trustee bank
regarding the trustee bank's management of the trusts. In
connection with the legal dispute, petitioners personally
incurred and paid legal and accounting fees totaling $63,247 in
1997. Petitioners reported $63 of interest income and $33,370 of
dividend income from the trust in 1997. Petitioners deducted the
legal and accounting fees on Schedule A - Itemized Deductions
under line 22 "Other expenses". Petitioners did not file Form
6251, Alternative Minimum Tax - Individuals, with their 1997
return.
Respondent determined that petitioners are liable for the
AMT in the amount of $10,257. Petitioners contend that they
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