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petitioner as they are ordinary and necessarily incurred as part
of petitioner’s duties as vice president of Craft-Barnett and to
maintain an office pursuant to the corporate resolution.
4. Post Office Box Rental
Petitioner incurred an expense of $250 for the rental of a
post office box. The post office box was used for Craft-Barnett,
Abilene Investment Properties, Inc., and ROC FLP. Accordingly,
petitioner can only deduct one-third of the $250 expense as this
expense is incurred as part of petitioner’s responsibility to
maintain an office. The other two-thirds relate to Abilene
Investment Properties, Inc., and ROC FLP, and petitioner has not
proved that he was required to incur this expense on behalf of
these entities or that this was an unreimbursed employee business
expense of these entities.
III. Expenses Not Related to Craft-Barnett
Petitioner claimed $3,300 in legal fees on the return for
attorney’s fees in settlement of certain expenses involving the
transfer of M.E. Moses stock.
Whether an ordinary and necessary litigation expense is
deductible under section 162(a) or 212 depends on the origin and
character of the claim for which the expense was incurred and
whether the claim bears a sufficient nexus to the taxpayer’s
business or income-producing activities. See Woodward v.
Commissioner, 397 U.S. 572 (1970); United States v. Gilmore, 372
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