- 2 - Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the year in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure. All references to petitioner in the singular are to petitioner Christine Kenton. The primary issue remaining for decision is whether petitioner’s legal fees relating to an employment discrimination lawsuit are deductible by petitioners on a Schedule A, Itemized Deductions, or on a Schedule C, Profit or Loss From Business, of petitioners’ 2001 joint Federal income tax return. If deductible on petitioners’ Schedule C, the deduction for the legal fees would avoid being reduced by the pernicious alternative minimum tax (AMT) and by the 2-percent floor generally applicable to miscellaneous itemized deductions. FINDINGS OF FACT Some of the facts have been stipulated and are so found. At the time the petition was filed, petitioners resided in Covelo, California. Beginning in the fall of 1995, petitioner was employed for 2 years by a television production company (Company). On or about January 23, 1998, petitioner was terminated by the Company. On May 28, 1998, petitioner entered into a contingent fee agreement with an attorney under which petitioner was obligated to pay the attorney 40 percent of amounts recovered in connectionPage: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011