Jane K. Nickell, Now Jane K. Johnson by Marriage, and Joan D. Kincaid v. Commissioner of Internal Revenue

RYAN, Circuit Judge.

The taxpayers, Jane Johnson and Joan Kincaid, appeal a Tax Court decision rejecting the deduction of certain legal expenses. The central issue in the case is whether Treas.Reg. § 1.212-l(k) should be read to create an exception to the general rule of *1267nondeductibility of expenses incurred to “recover” property. The proposed exception would render deductible, under I.R.C. § 212, the expense of litigation to recover title or possession of stock.

We conclude that the Tax Court’s holding denying the deductibility of these expenses should be affirmed. We hold, however, that the…