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10huron
Level 1
April 17, 2023

can the 1/3 legal fees in a settled law suit be deducted on the client's taxes

  • April 17, 2023
  • 2 replies
  • 12 views

In the settlement, the client received 2/3 and the attorney received 1/3. Can the client deduct that 1/3 on his schedule C.  The client got 1/3 as a W2 and the second 1/3 on a 1099 NEC which drives a schedule C

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    2 replies

    BobKamman
    BobKamman
    Level 15
    April 17, 2023

    Depends on what kind of claim was settled. 

      T
      TaxGuyBill
      Level 15
      April 17, 2023

      Don't blindly enter tax forms into the software.  Most likely it should be on a 1099-MISC.  Get the legal documents and find out EXACTLY what the payment was for. 

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