Attorney Fees

[S T]

Are attorney Fees deductible by a T/P for Power of Attorney Forms to appoint someone to act in the T/p Financial Affairs. The Power of Attorney was necessary to release some Annuity Funds, and also for IRS and State of California Tax Matters dating back to 2003. The t/p is not under conservatorship, but is not capable of handling her own financial affairs.

If so, they would be deductible under Sched A - Misc subject to 2% reduction?

Thanks

Sandy

[Burke]

I don't think so. Wills are drawn up to deal with financial assets, too but they are not deductible either. Attorneys' fees paid for actual representation by an attorney to go after such funds would be another matter. So if the attorney-in-fact incurred such expenses, those would be deductible in my opinion, but not the cost of the document. The POA probably covers a lot of other duties and responsibilities as well.

[S T]

Fees not itemized

Thanks Burke,
That was my thought as well, and the Fees are not itemized. I have a copy of the POA and it does cover a multitude of Financial items, as well as Health Directives.

Sandy

[taxea]

the portion of atty fee that retains income is what is deductible not any of the other items.

[S T]

Talked to

Talked to the POA Rep - so she is going to look up whether or not the Attorney itemized the bill to differentiate the issue with obtaining the Annuity Income which is taxable versus the General Legal preparation of POA forms and directives.

Thanks for input on this.

Sandy

[S T]

Itemized

Finally received a copy of the itemized billing fromt he Attorney - it was very well categorized as to the charges for the Annuity (which is taxable income) versus other legal matters that were for health care and other issues not relating to taxable income.

I am able to isolate the fees charged just to the Annuity - and an installment agreement for sale of some property that produced taxable income.

Misc Ded subject to 2% ??

Thanks

Sandy

[taxea]

Attys bill for every second and they usually do bill in detail.

[S T]

Actually

This was billed each .10 = 6 minutes

at $400 per hour



something to be learned from this, maybe!

Do we have an opinon on the deductibility for Tax purposes on the items that are itemized related to taxable income?

Sandy

[Burke]

If the itemized bill clearly delineates those charges pertaining to taxable income, they would be deductible subj to the 2% exclusion, IMO. It's the same principle as fees separately stated in a divorce case, for the pursuit of alimony. And I have had several of those.

[S T]

Great

Burke, as always thank you for your post and your wisdom.

Yes I have prudently isolated the time and charges to the "taxable" income.

Sandy