                  T.C. Summary Opinion 2001-81



                     UNITED STATES TAX COURT



          THOMAS E. & DOROTHY J. ROSS, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 14285-99S.                     Filed June 11, 2001.



     Thomas E. Ross, pro se.

     Randall L. Preheim, for respondent.



     PAJAK, Special Trial Judge:    This case was heard pursuant to

the provisions of section 7463 of the Internal Revenue Code in

effect at the time the petition was filed.   The decision to be

entered is not reviewable by any other court, and this opinion

should not be cited as authority.   Unless otherwise indicated,

subsequent section references are to the Internal Revenue Code in

effect for the year in issue.
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     Respondent determined a deficiency in petitioners' 1997

Federal income tax in the amount of $10,257.   This Court must

decide whether petitioners are liable for the alternative minimum

tax (AMT) under section 55.   Petitioners do not dispute the

computation of the AMT.

     Some of the facts in this case have been stipulated and are

so found.   Petitioners resided in Evergreen, Colorado, at the

time they filed their petition.

     Dorothy Ross (Mrs. Ross) was the beneficiary of two trusts

during the year at issue.   The trusts invested only in one mutual

fund and did not invest in rental property or engage in the

operation of a trade or business.   A legal dispute arose with

respect to the beneficiaries of the trusts and the trustee bank

regarding the trustee bank's management of the trusts.   In

connection with the legal dispute, petitioners personally

incurred and paid legal and accounting fees totaling $63,247 in

1997.   Petitioners reported $63 of interest income and $33,370 of

dividend income from the trust in 1997.   Petitioners deducted the

legal and accounting fees on Schedule A - Itemized Deductions

under line 22 "Other expenses".   Petitioners did not file Form

6251, Alternative Minimum Tax - Individuals, with their 1997

return.

     Respondent determined that petitioners are liable for the

AMT in the amount of $10,257.   Petitioners contend that they
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incorrectly deducted the legal and accounting fees as

miscellaneous itemized deductions.      They claim the fees should

have been deducted directly from the trust income, or, in other

words, from gross income, in the same manner that business or

rental property expenses are directly deducted from business or

rental income, respectively.    Petitioners allege that if they had

reported the fees in this manner, then the AMT would not apply.

In their memorandum, petitioners contended that the application

of the AMT to their situation is not fair and was not intended by

Congress, but they did not pursue this argument at trial.

     The alternative minimum tax is imposed on taxpayers under

section 55.   The determination of an individual's alternative

minimum tax requires a recomputation of the taxable income

leading to a new tax base, the alternative minimum taxable

income.   Sec. 55(b)(2).   In computing the alternative minimum

taxable income, no deduction is allowed for miscellaneous

itemized deductions as defined in section 67(b).      Sec. 56(b)(1).

     Section 212 allows an individual a deduction for all the

ordinary and necessary expenses paid or incurred during the

taxable year for the production or collection of income or for

the management, conservation, or maintenance of property held for

the production of income.    Sec. 212(1) and (2).    The legal and

accounting fees in this case are such expenses.      Burch v. United

States, 698 F.2d 575, 579 (2d Cir. 1983) (taxpayer allowed
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deduction for legal fees incurred to protect income-producing

property from excessive management fees); Barr v. Commissioner,

T.C. Memo. 1989-420.     Under section 67(b), this deduction is a

miscellaneous itemized deduction.

     Section 62(a) lists the deductions allowable in arriving at

adjusted gross income.    One of these deductions is for trade or

business expenses.   Sec. 62(a)(1).      However, the trusts are not a

trade or business, nor do the trusts carry on a trade or

business.   Section 62(a)(4) allows a deduction for expenses

allowed under section 212 if the expenses are attributable to

property held for the production of rents or royalties.      Mrs.

Ross did not receive rents or royalties from the trusts.

Therefore, this section does not apply.      The deduction for the

legal and accounting fees is not one of the deductions allowable

in arriving at adjusted gross income under section 62(a).      We

find that petitioners correctly reported the legal and accounting

fees as a miscellaneous itemized deduction.      As a result, the

AMT, as determined by respondent, applies to petitioners.

     We have previously held that the text of the AMT statute is

clear and unambiguous.     Klaassen v. Commissioner, T.C. Memo.

1998-241, affd. without published opinion 182 F.3d 932 (10th Cir.

1999).   However unfair this statute might be to petitioners, we

must apply the law as written.     Id.    "The proper place for a

consideration of [petitioners'] complaint is the halls of
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Congress, not here."   Hays Corp. v. Commissioner, 40 T.C. 436,

443 (1963), affd. 331 F.2d 422 (7th Cir. 1964).     Accordingly, we

sustain respondent's determination.

     Reviewed and adopted as the report of the Small Tax Case

Division.



                                            Decision will be entered

                                       for respondent.
