-20-
because those expenditures are an ordinary and necessary business
expense under section 162. That is the amount of legal fees that
Donaldson, Albert billed to OMCC and that OMCC paid to that firm
during 1997.
We agree with respondent that OMCC may not deduct the
portions of the legal and professional fees that it paid on
behalf of petitioner. Stewart, Sokol billed petitioner
$56,617.84 for legal fees, and OMCC paid that bill in 1997.
Those fees were incurred to protect and defend petitioner’s title
to real estate and other personal assets that she acquired in her
own name over the years. See, e.g., Hood v. Commissioner, 115
T.C. 172 (2000). Petitioner may not currently deduct but must
capitalize her share of the legal and professional fees incurred
with regard to the lawsuit.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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