David E. Benson - Page 8




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          145, 153 (1928).”  O’Malley v. Commissioner, 91 T.C. 352, 361-362           
          (1988).  In determining whether such expenses are deductible, we            
          must focus on “the origin and character of the claim with respect           
          to which [the] expense was incurred”.  United States v. Gilmore,            
          supra at 49.                                                                
               In support of his position that he is entitled to deduct in            
          the 1999 Schedule C the $5,000 claimed legal expense, petitioner            
          testified:                                                                  
               It was in the process of building up my business.  I                   
               was in computer consulting, computer software, and it                  
               was computer equipment that I had tried to purchase at                 
               a slight discount.                                                     
          Petitioner did not present any other evidence in support of his             
          position with respect to the $5,000 claimed legal expense.                  
               On the instant record, we find that petitioner has failed to           
          carry his burden of establishing that the criminal proceeding in            
          which Mr. Christie represented petitioner arose in connection               
          with or proximately resulted from a business or profit-seeking              
          activity of petitioner.  On that record, we further find that               
          petitioner has failed to carry his burden of establishing that              
          the origin and the character of the claim with respect to which             
          the $5,000 claimed legal expense was incurred was a business or             
          profit-seeking activity of petitioner.                                      
               On the record before us, we find that petitioner has failed            
          to carry his burden of establishing that he is entitled to deduct           
          in the 1999 Schedule C the $5,000 claimed legal expense.                    






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