Legal fees for defending title usually have to be added to basis. What about legal fees for loosing party? Are they a capital loss? That's the only category I can think of.
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Insufficient detail. -
Legal Fees
I think the answer hinges on whether the real estate in question was a capital asset or an asset used in a trade or business...
If the real estate in question was an asset used in a trade or business, or the taxpayer intended to use it in a trade or business, then the associated legal fees might be an ordinary and necessary business expense of that trade or business.
Rental property is a trade or business.
Right?
BMKBurton M. Koss
koss@usakoss.net
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The map is not the territory...
and the instruction book is not the process.Comment
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Taxpayer wanted to buy farm land, which was used for farming but third party got it. What you are saying is it's a business loss if intended to be farmed but capital loss if no intention of farming, right?Comment
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Watch out
legal fees and expenses for an "individual" in connection with obtaining a business that does not get purchased as I remember are not deductable and can not be capital because nothing was received. Attorney fees for definding title to income producing property are deductable. There may be some variations from this and would like to hear them.Comment
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