James C. Cooper & Lorelei M. Cooper v. Commissioner

Marvel, Judge:

Respondent determined deficiencies in petitioners’ Federal income tax of $580,961, $384,705, and $496,236 for 2006, 2007, and 2008, respectively, and accuracy-related penalties under section 6662(a) 1 of $116,192, $76,941, and $99,247 for 2006, 2007, and 2008, respectively. After concessions, 2 the issues for decision are: (1) whether royalties petitioner James Cooper received during 2006, 2007, and 2008 qualified for capital gain treatment pursuant to section 1235; (2) whether petitioners may deduct professional fees paid during 2006 that were attributable to expenses charged…