law fees

[sha]

Are payments to a lawyer to work with credit cards and banks to reduce or cancel debts deductible? The client received multiple 1099Cs and those are reportable as income. The lawyer took a percentage of those forgiven debts as payment for his work.

Thanks for any help,
SF

[rfk]

Legal Fees

If they are deductible, they would be on Schedule A, 2% floor... but "if they paid or incurred for the production of income or for the management, conservation, or maintenance of income producing property."

Check out TTB page 4-26

RFK