Deductibility of Fee

Forum|Forum|2 years ago
February 28, 2024
2 replies
25 views

A company located unclaimed money from the TX State Comptroller for a client. Client wrote a check for the fee. This is a sizable amount. Trying to find a way to deduct the fee. Seems it

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IRonMaN

Level 15

Since the fee was a sizable amount, I assume the long lost money was a sizable amount? So are you having the client pick up their new found treasure as income? Just because someone pays someone else for something doesn't mean the fee is going to be deductible.

Slava Ukraini!

U

uhtaxmbaAuthor

Level 4

Yes, new found treasure was a production payment.....oil and gas. Yes, it is income...whether I could classify as a royalty is a long shot. Just looking for ideas. I am pretty sure the fee isn't deductible. Client wasn't looking, company contacted them. And it is sizable.

sjrcpa

Level 15

Then perhaps it is a fee for production of that income. Maybe a Schedule E deduction.

The more I know the more I don’t know.

sjrcpa

Level 15

Is the amount received taxable?

FYI - tell your client they could have recovered it themself for free.

The more I know the more I don’t know.

IRonMaN

Level 15

Two seconds different between posts -------- that is like a photo finish 📸

Slava Ukraini!

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