Mosby v. Commissioner
United States Tax Court
Petitioners incurred legal fees in connection with an inverse condemnation suit against the United States arising out of a dispute over mineral rights reserved in a deed. Held, the origin of the claim test, not the primary purpose test, is applied. Held, further, such expenditures are capital in nature and, therefore, are not currently deductible.
1Opinion of the Court
OPINION
COHEN, Judge:
Respondent determined the following deficiencies in petitioners’ income taxes:
Name Docket No. Year Deficiencies
Mosby 24519-83 1977 $13,104
1978 1,240
1979 4,774
Foster 24534-83 1978 6,033
1979 417
The sole issue for decision is whether petitioners may deduct legal fees incurred in connection with an inverse condemnation suit arising out of a dispute over mineral rights reserved in a deed to the United States. Petitioners contend that the legal fees are deductible because the primary purpose of the litigation was to enable them to conduct a quarry business. Further, petitioners…
2Cases cited12 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- United States v. GilmoreSupreme Court of the United States · 1963
- Woodward v. CommissionerSupreme Court of the United States · 1970
- Boagni v. CommissionerUnited States Tax Court · 1973
- Reed v. CommissionerUnited States Tax Court · 1970
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3Cited by13 opinions
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