Tax Deduction Of Legal Fees
July 8th, 2010
If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!
Question: Claiming a judgment/interest collected on taxes?
I will most likely need to head to an accountant this year, but was wondering if anyone could help shed some light. After 3 years and 2 lawyers, I finally won a judgment against someone I loaned $5,600.
The amount collected was around $7,600 and included interest accrued and $900 allowance for legal fees. But after the lawyers 33% and more than $900 in fees to retain two different lawyers, the $5,000 I received was less than the original loan of $5,600.
I know tax law says to claim interest earned, and then include the lawyer fees in my Itemized Deductions. I do not need to claim the amount from the loan, since I never declared a bad debt and paid taxes on that $5,600 in 2005.
My lawyer’s office said that they do not report the interest to the government, and said I should not have to pay taxes on it. Is this true, since the amount actually paid to me is less than the original loan amount?
Thanks for any help on this!
Answer: If no 1099 is issued for the interest, I would not report it. Good Luck.
Items on Amazon Right Now for Tax Deduction Of Legal Fees:
|
|
Proper characterization of deductible legal fees.: An article from: The Tax Adviser $5.95 This digital document is an article from The Tax Adviser, published by American Institute of CPA’s on August 1, 2001. The length of the article is 1598 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.Citation DetailsTitl… |
|
|
Bankruptcy professional fees are not SLLs for carryback purposes.(specified liability losses): An article from: The Tax Adviser $5.95 This digital document is an article from The Tax Adviser, published by American Institute of CPA’s on September 1, 2003. The length of the article is 1023 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.Citation DetailsT… |
|
|
Deductibility of legal expenses in corporate reorganizations.: An article from: The Tax Adviser $5.95 This digital document is an article from The Tax Adviser, published by American Institute of CPA’s on October 1, 1994. The length of the article is 1668 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.From the supplier: … |
The danger of managed investment schemes
In a speech addressing the Agribusiness Association of Australia, David Bryant explains why tax-effective managed investment funds are fundamentally flawed and pose a significant risk to consumers.
Tax Tips & Information : How to Use Legal Fees as a Tax Deduction
Posted in 
Tags: