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Whether petitioners are entitled to deduct certain legal expenses
paid in connection with their daughter’s domestic relations
proceedings; (2) whether petitioners are entitled to claim
depreciation deductions with respect to a rental residence and,
if so, the amount of depreciation to which they are entitled; and
(3) whether petitioners are liable for a section 6662(a) penalty
with respect to the legal expense issue.
I. Legal and Professional Fee Deduction
FINDINGS OF FACT2
At all pertinent times, petitioners were married and resided
in League City, Texas. Jesse Emmit Rupert (petitioner) retired
from his position as a drilling manager for Atlantic Richfield
Indonesia, Inc. (Atlantic Richfield), on February 1, 1987. Since
his retirement, petitioner has been involved in investing and did
a limited amount of engineering consulting during 1991.
In 1992, petitioners’ daughter Michelle Ann Steele
(Michelle) became involved in a divorce proceeding against her
then husband, Tad Edward Wilkinson (Tad). When the proceeding
was instituted, Michelle and Tad had a daughter, Ashley, who was
about 2 years old. During the period 1992 through 1995,
2 Because of the discrete nature of the facts and legal
discussion for each issue, the findings of fact and legal
discussion for each issue are separately set forth. The fact
finding is being segregated for convenience only, and all
findings are applicable throughout the opinion. The parties’
stipulation of facts is incorporated by this reference.
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