Attorney's fees

[Brian EA]

My client spent $16000 in 2005 in attorneys fees . His fathers's house which he inherited is being claimed by another person.

Can he deduct the attorney's fees on schedule A subject to 2% deduction.

West

[cpadan]

¶ 16175. Legal fees of protecting investments.
Although legal fees incurred to acquire, defend or protect title to property are capital expenditures, see ¶ 16168 , fees incurred to protect an investment can be deductible. Thus, legal fees for advice on investment plans or to protect a stockholder's investment in his corporation have been allowed as deductible expenses. 41 But fees for legal advice on the type of securities to be placed in trust aren't deductible. 42

Per RIA Checkpoint, hope this helps,
Dan

[skhyatt]

Legal expenses

Quoting from the CCH Master Tax Guide:

"Legal expenses incurred in defending or perfecting title to property, in the acquisition or disposition of property, or in developing or improving property are not deductible and must be capitalized."