In most situations, individuals can’t deduct legal expenses. For tax purposes, they are usually treated as either a personal outlay (nondeductible) or part of the cost of acquiring an asset such as real estate or a patent (depreciable or amortizable over a number of years if the asset is used for business). However, some recent developments give hope for immediate deductions. Here are the stories.
Condo owner could deduct legal costs as home office expense In a 2015 decision, the Tax Court allowed the taxpayer to claim a home office deduction for legal expenses incurred in a cause of action against her condo homeowners association (HOA) and to defend herself against related misdemeanor criminal charges. The taxpayer operated her unincorporated IT business out of a home office in her condo. She deducted 50% of various condo expenditures as home office expenses on her Schedule C (Profit or Loss from Business) for the IT business. Read Article: http://www.marketwatch.com/story/when-you-can-deduct-legal-expenses-on-your-taxes-2017-03-28 Comments are closed.
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