- 18 - portion of the litigation recovery. Commissioner v. Banks, 543 U.S. 426 (2005). Section 212 allows a deduction for all of the ordinary and necessary expenses paid or incurred during the taxable year for the production or collection of income. Sec. 212(1). The attorney’s fees paid by petitioner would be allowed as a itemized deduction under this section. The deduction would, however, be subject to the 2-percent floor under section 67 because it does not fall under any of the section 67(b) exclusions. Respondent has conceded that petitioner may deduct his attorney’s fees of $29,626.83 ($6,595.72 + $8,831.11 + $14,200 = $29,626.83) incurred in 2002 as a miscellaneous itemized deduction for that year under section 67, subject to the 2-percent floor. See Commissioner v. Banks, supra at 432. In regard to the insurance benefit paid to petitioner in 2002, section 451(a) provides that the amount of any item of gross income shall be included in the gross income for the taxable year in which received by the taxpayer unless, under the method of accounting used in computing taxable income, such amount is to be properly accounted for in a different period. Income is constructively received by a taxpayer in the taxable year in which such income is credited to the taxpayer’s account, is set apart for the taxpayer, or is otherwise made available so that the taxpayer could have drawn upon it during the taxable year if notice of intention to withdraw had been given. IncomePage: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
Last modified: May 25, 2011