Wagner v. Commissioner
United States Tax Court
In 1972, petitioner sold certain stock for $ 2,400,000, payable $ 700,000 down with the balance to be paid in 12 quarterly installments. Petitioner reported his gain on the transaction as long-term capital gain on the installment basis. In 1974, the buyer brought suit against petitioner for damages alleging that petitioner violated sec. 10 of the Securities Act of 1934 and rule 10(b)-5 of the SEC in failing to disclose certain information affecting the value of the stock.
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In 1972, petitioner sold certain stock for $ 2,400,000, payable $ 700,000 down with the balance to be paid in 12 quarterly installments. Petitioner reported his gain on the transaction as long-term capital gain on the installment basis. In 1974, the buyer brought suit against petitioner for damages alleging that petitioner violated sec. 10 of the Securities Act of 1934 and rule 10(b)-5 of the SEC in failing to disclose certain information affecting the value of the stock. Petitioner incurred litigation expenses in defending the suit in 1975, 1976, and 1977, which he deducted as expenses…
1Opinion of the Court
OPINION
Drennen, Judge:
Respondent determined deficiencies in petitioners’ Federal income taxes as follows:
Docket No. TYE Dec. 31 Deficiency
6290-79 1975 $15,394
13865-79 1976 7,510
13865-79 1977 10,136
These cases have been consolidated for purposes of trial, briefing, and opinion.
After concessions by petitioners, the only issue is whether attorney’s and accountant’s fees and other legal expenses paid by petitioner in connection with certain litigation are deductible expenses pursuant to section 2121 or are nondeductible capital expenditures.
The cases were submitted on facts that were fully…
2Cases cited20 opinions
- United States v. GilmoreSupreme Court of the United States · 1963
- Woodward v. CommissionerSupreme Court of the United States · 1970
- United States v. Hilton Hotels Corp.Supreme Court of the United States · 1970
- Harrison E. Spangler and Myrtle B. Spangler v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1963
- Boagni v. CommissionerUnited States Tax Court · 1973
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3Cited by14 opinions
- Neely v. CommissionerUnited States Tax Court · 1985
- Barrett v. CommissionerUnited States Tax Court · 1991
- Louis A. Mitchell v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1996
- Jasko v. CommissionerUnited States Tax Court · 1996
- Barrett v. CommissionerUnited States Tax Court · 1991
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