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United States v. Gilmore, 372 U.S. 39 (1963); see also sec. 262
(disallowing deductions for personal, living, and family
expenses). Because petitioner’s divorce was concluded before
1992, we infer that this $65,685.34 was owing in 1992 as well and
deny petitioner a deduction for this amount.
Except for the fees incurred in connection with petitioner’s
divorce, which are clearly not deductible, respondent failed to
establish that any of the fees claimed by Lurie & Zepeda would
not have been deductible if paid without contest. Respondent
adduced evidence of the fees and costs owing on only one other
matter, the Emerald Bay matter for which Lurie & Zepeda claimed
fees of $103,175.05 as of 1992. The Emerald Bay matter involved
a business or investment expense--a dispute over a note payable
in connection with the sale of investment property. Respondent
failed to establish that petitioner would not be entitled to a
deduction if these fees had been paid without contest. Respondent
offered no evidence that petitioner would have been denied a
deduction if any of the other fees claimed by Lurie & Zepeda had
been paid without contest. Therefore, petitioner is entitled to
deduct in 1992 $729,220.21, representing the full $794,905.55 he
paid to Lurie & Zepeda in 1992 (and withheld in trust pending
resolution of the fee dispute) less the $65,685.34 in
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