Can you write off legal fees for bankruptcy on your taxes?

[syd74]

I'm going through TurboTax and I see several types of legal fees listed, but BK isn't mentioned either way. Is it an allowable deduction?

[justbroke]

I can't provide tax advice, but if you read closely, you will see that the ONLY legal fees that you can claim on taxes, are related to actually fighting the IRS or related to tax preparation.

If you are unsure, consult with H&R Block. They may answer it for you.

[syd74]

Thanks, Justbroke! Too bad!

[lillymarlene]

I filed my Chapter 13 2010, and was able to deduct the legal fees that I had paid to my attorney. I could be wrong, but I believe it's because my bankruptcy was considered to be a "business bankruptcy." My accountant that I've used for over 20 years, also had advised that this was O.K.

[helpmeout]

I filed my Chapter 13 2010, and was able to deduct the legal fees that I had paid to my attorney. I could be wrong, but I believe it's because my bankruptcy was considered to be a "business bankruptcy." My accountant that I've used for over 20 years, also had advised that this was O.K.

You are right in that you were able to deduct the fees as a business expense because it was for a business. One cannot deduct legal fees for a personal BK.

[drowning123]

Uh oh. I included mine on my 2010 tax return. I haven't heard anything yet from the IRS. I had no idea my bankruptcy attorney fee wasn't tax deductible. Oh well.

[justbroke]

The IRS usually doesn't catch these things unless you actually are audited. They cannot audit every one. They have certain triggers which would generate an audit, or it could be the "random" audit. Just because they didn't catch it, doesn't mean that another system may not catch it 2-3 years later.

[spidge]

I have had minor adjustments to returns from a few years old, so you can sit on it and wait for the letter. Of course the sooner you correct it the less interest and fines will be connected to it.

Have dice?