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What Legal Fees Can I Deduct?

Legal fees concerning real estate rental properties or businesses are properly deducted on the schedules for those activities.

On Schedule A, as a miscellaneous itemized deduction, you can generally deduct legal fees related to:

  • Investment property that produces taxable income.
  • Work-related civil lawsuits, needed to safeguard your employment.
  • Tax advice or audit representation.
  • Collection matters if the resulting income will be taxable (i.e., alimony, punitive damages, recovery of income, etc.).

You cannot deduct personal legal expenses, such as expenses of drafting a will or trust, divorce proceedings, collection of child support, or matters involving income exempt from income tax.



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We do not offer legal advice. All information provided on this website is for informational purposes only and is not a substitute for proper legal advice. If you have legal questions, we recommend that you seek the advice of legal professionals.

Tax Disclaimer: To ensure compliance with IRS Rules, any U.S. federal tax advice provided in this communication is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer (i) for the purpose of avoiding tax penalties that may be imposed on the recipient or any other taxpayer under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party a partnership or other entity, investment plan, arrangement or other transaction addressed herein.

Copyright 2017 Wink Tax Services / Wink Inc.
Last modified: January 30, 2017