Corporation Question

[GTS1101]

I have a client who was a co-owner in a corporation. He was the vice president. The company was not working out so he left. Several years later the other owner sued him saying he abandoned the business. They have put a lien against his house for approx 25,000. My question is if he pays off this judgment against him to clear his record can he deduct this as an investment loss? I would say no but I am not sure. Anybody else have any insight as to whether he could claim a loss for this?

Thanks!

GTS1101

[Gretel]

That probably depends on what the judgment was for. To cover some biz expenses or just a fine for other damages.

[GTS1101]

Corporation Question

It is not to cover business expenses. It is a fine because he abandoned the business.
Thanks for your insight.

GTS1101

[ChEAr$]

You still need more information

It is not to cover business expenses. It is a fine because he abandoned the business.
Thanks for your insight.

GTS1101

In a civil suit, a judgement is not a "fine", which is levied only by some government agency.

Get a copy of all the papers and ready them carefully.

[GTS1101]

still need more info

I will do my best to see if I can get more info and take a look at the judgment myself. I am not sure if it was designated as fine or not, I was just told that there was a judgment against him for approx 25,000 because he abandoned the business and the other owner won the case.

GTS1101