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Can a owner of rental property deduct workers compensation claims as a result of a law suit?

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Level 15

PLEASE stop bombarding us with the same question every few minutes, OK?

Give folks a chance to answer (if anyone is so inclined...)

Former Chump... umm.... AllStar.
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Level 15

If your client was ordered to pay workers' compensation by the court, the presumption is that there are legal grounds for the landlord to carry that liability.  On that basis, the cost would generally be considered ordinary and necessary, except to the extent fines and/or punitive damages were included.  You should probably review the case and settlement in more details to determine the extent to which the cost may be deductible.

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Still an AllStar
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Level 15

You should also consider whether any of the workers compensation is allocable to jobs that require capitalization, in which case, the relevant portion may need to be capitalized and not be currently deductible.

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Still an AllStar
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Level 15

Hi there,

You’ve come to an Intuit site supporting tax professionals, and you may be looking for support as an individual taxpayer. Please visit the TurboTax Help site for support.

Cheers!

 


ex-AllStar