dissenting: Freddie was regularly engaged in business as a motion picture actor. A part of the attorneys’ fees was deductible as ordinary and necessary expenses paid in carrying on that business. Sec. 23 (a) (1). These would include the fees incident to the suits involving agents’ commissions, the injunction suit, and the new contract, and reasonable fees incident to the appointment of a guardian to look after contracts and business affairs for the minor. But I find no section of the statute under which the other fees would be deductible, even though Myllicent went through all of this litigation for the purpose of preserving Freddie’s earnings for his benefit alone, and even though she formally relinquished her right as parent to those earnings.
These other attorneys’ fees to which I refer are allowed in the report as deductions under section 23 (a) (2) as “non-trade” or “non-business” expenses. If they were really expenses of collecting or producing income, they would relate directly to the business and would be deductible under (1), not (2). Cf. Ralph D. Hubbart, 4 T. C. 121. Four cases, Clark, Vanderbilt, Van Wart, and Felt, are distinguished in the prevailing opinion on the ground that no business was carried on in those cases, whereas Freddie had a business. Obviously, this distinction will not do for present purposes, since the deductions are being allowed as nonbusiness expenses and the existence of a business is not necessary.
These additional attorneys’ fees were not “non-trade” or “non-business” expenses within the meaning of section 23 (a) (2). In the first place, they had nothing to do with producing or collecting the income from Freddie’s acting. Freddie produced that income without, any benefit from these suits and MGM paid it willingly, so that the suits served in no way to assist in producing or collecting it. None of the suits to which I refer had anything to do with the collection or production of the income.
Neither are the expenditures deductible as ordinary and necessary expenses paid or incurred in the management, conservation, or maintenance of property held for the production of income. This provision means, held for the production of taxable income. See section 24 (a) (5). Only an undisclosed part of Freddie’s property was held for the production of taxable income. The most that can be said is that the protracted family litigation was, from Freddie’s standpoint, for the conservation of all of Freddie’s property for whatever purpose it was held so that it would be his property rather than the property of his natural parents. There is nothing in the statute allowing the deduction of expenditures of that kind. It has been held that expenditures of conservation in the sense of protecting property from adverse attack are not deductible. Bowers v. Lumpkin, 140 Fed. (2d) 927; John W. Willmott, 2 T. C. 321. Not all of the attorneys’ fees were deductible.
TURNER, J., agrees with this dissent.