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amounts placed in his attorney’s trust account pending resolution
of the fee dispute, but only to the extent that the amounts would
have been deductible if the attorney’s claims had been undisputed
and the amounts held in trust had been paid to the attorney in
satisfaction of the attorney’s claims. Because it has been
established that only $65,685.34 claimed by the attorney for
handling petitioner’s divorce would not have been deductible if
paid, we hold that petitioner is entitled to deduct in 1992,
under section 461(f), $729,220.21.
(3) Whether petitioner is entitled to treat any portion of
the additional $128,275 claimed on his 1992 return as cost of
goods sold. We hold that he is not.
(4) Whether petitioner is entitled to deduct as a business
expense any portion of the additional $128,275 that he wrongly
claimed as a cost of goods sold on his 1992 return. We uphold
respondent’s determination allowing a deduction for $35,000 and
disallowing any deduction for the balance of $93,275.
(5) Whether petitioner may carry forward total net operating
losses of $148,367 from 1990 and 1991 to 1992 and $323,352 from
1992 to 1994. We hold that he may not.
(6) Whether petitioner may deduct depreciation in 1992 that
exceeds the amount allowed by respondent. We hold that he may
not.
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