## Facts

- Dr. Meyer J. Fleischman executed an antenuptial agreement with Joan Ruth Francis in 1955 providing that, upon divorce, he would pay $5,000 and she would release all interests in his property.
- In 1961, Joan initiated divorce proceedings and also pursued a separate lawsuit to set aside the antenuptial agreement to seek a property division.
- The divorce became final in 1962, and the separate action to invalidate the antenuptial agreement was dismissed with prejudice.
- Dr. Fleischman incurred $3,000 in legal fees defending the suit to invalidate the antenuptial agreement.
- He deducted the $3,000 as a nonbusiness expense on his 1962 federal income tax return; the parties stipulated the fees were solely for defending the antenuptial-agreement litigation and were not for tax advice.
- The Commissioner disallowed the deduction and determined a 1962 income tax deficiency of $725.60.

## Issues

1. Whether legal fees incurred to defend a spouse’s lawsuit to set aside an antenuptial agreement are deductible under I.R.C. § 212 as expenses for the management, conservation, or maintenance of property held for the production of income.
2. Whether such fees are nondeductible personal or family expenses under I.R.C. § 262 when the claim arises from marital rights and divorce.

## Decision

- The Tax Court sustained the Commissioner’s deficiency determination.
- The court held the $3,000 legal fees were personal and nondeductible under I.R.C. § 262.
- The court rejected treatment of the fees as deductible under I.R.C. § 212 because the claim’s origin was the marital relationship, not income production or property management.
- Judgment was entered for the Commissioner, disallowing the deduction in full.

## Legal Principles

- Deductibility of litigation expenses depends on the “origin and character” of the claim giving rise to the expense, not on the possible economic consequences to income-producing property.
- When the claim would not exist “but for” the marital relationship (including disputes arising from divorce and marital property rights), related legal expenses are personal or family expenses barred by I.R.C. § 262.
- I.R.C. § 212 does not convert divorce-related legal expenses into deductible expenses merely because the litigation may affect assets that produce income.
- Divorce-context fees may be deductible only when they are specifically attributable to a deductible purpose (e.g., tax advice), and a taxpayer must substantiate that the fees were incurred for that purpose.

## Conclusion

The Tax Court held that legal fees paid to defend a divorce-related suit challenging an antenuptial agreement were nondeductible personal expenses because the claim originated in the marital relationship, bringing the expenses within I.R.C. § 262 rather than I.R.C. § 212.


Fleischman v. Commissioner, 45 T.C. 439 (U.S. Tax Ct. 1966)