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Are legal services tax deductible? (WA, US)?

Public Comments

1. No, legal services are not tax deductible unless they are related to a business. Personally, they are not a tax deduction.
2. Business related only
3. Dear Edo, This is a good question. The answer is sometimes. If the legal expenses are related to a trade or business they are deductible, however, even then some costs have to be capitalized (i.e. they are not deductible in the current year). If you are an individual, legal expenses are deductible if they are related to the production of income or if they are related to income taxes. For example, legal fees paid for a divorce need to be broken out between costs associated with alimony (i.e. income) and costs associated with divorce. The former are deductible. Likewise, if you incur legal costs related to the production of income (i.e. have an attorney review an investment proposal, have an attorney advise you on a purchase of land, potential business or anything to do with taxes or earning income), then it is deductible. Other legal fees such as related to your job which are unreimbursed are also deductible. If you pay legal fees associated with your house, they are not deductible, however, they are included in the basis of your home which means you can offset any potential gain when you sell the property. I hope this gives you a little information about legal fees. Doctor K