Long v. Commissioner of IRS, No. 14-10288 (11th Cir. 2014)
Annotate this CasePetitioner sought review of the Tax Court's final order and decision for redetermination of deficiency brought under 26 U.S.C. 6213(a), arguing that the Tax Court erred by concluding that the $5.75 million petitioner received from the assignment of his position as plaintiff in a lawsuit constituted taxable ordinary income, rather than long term capital gains. The court held that the profit from the $5.75 million petitioner received in the sale of his position in the lawsuit is more appropriately characterized as capital gains. Therefore, the court reversed the Tax Court's decision as to this issue and remanded with instructions. The court rejected petitioner's argument that the Tax Court erred by not treating his $600,00 payment to Steelervest as a deductible "reduction of income" where petitioner has not met his burden of clearly establishing his entitlement to a particular deduction. Therefore, the court affirmed the Tax Court's decision as to this issue. Finally, because petitioner's evidence of unaccounted legal fees was insufficient and petitioner did not present sufficient evidence of a deductible expense, the court affirmed the Tax Court's decision on this issue. Accordingly, the court affirmed in part and reversed in part, remanding with instructions for further proceedings.
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