Lumpkin (plaintiff) inherited half the stock of a certain corporation and purchased the remainder. The Attorney General of South Carolina challenged the validity of her purchase. The taxpayer defended her title to the property in court and prevailed. She incurred litigation expenses of $250 in 1936 and $26,798.22 in 1937. Lumpkin deducted these amounts as ordinary and necessary expenses. The Commissioner (defendant) disallowed the deductions and assessed additional taxes. Lumpkin paid the taxes and brought suit in federal district court to recover the payment. The District Court ruled in Lumpkin’s favor.