Expense of breaking contract

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  • Barb
    Member
    • Jan 2008
    • 47
    #1

    Expense of breaking contract

    Are you allowed to write off the $$s paid to a Company because you had to break a contract with them? I have a company that their identity has been confused with another company who is in trouble with the state, IRS,anf the state has stopped them from doing business.

    Because of this, they had to break some contracts that they had in the amount of $20,000. Can I write this off somewhere?
    Tags: None
    • ChEAr$
      Senior Member
      • Dec 2005
      • 3872
      #2
      Only if

      Originally posted by Barb
      Are you allowed to write off the $$s paid to a Company because you had to break a contract with them? I have a company that their identity has been confused with another company who is in trouble with the state, IRS,anf the state has stopped them from doing business.

      Because of this, they had to break some contracts that they had in the amount of $20,000. Can I write this off somewhere?
      the contract was business connected. For a personal contract, no.
      ChEAr$,
      Harlan Lunsford, EA n LA

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        • Barb
          Member
          • Jan 2008
          • 47
          #3
          Expense of breaking contract

          Yes, it was business. Do I just enter it on the Sch C, other deductions?

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