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Retainer paid to attorney for rental property with neighbor/property line issues

Just-Lisa-Now-
Level 15
Level 15

Gave the attorney a retainer in Nov 2019 (held in a trust account) but the atty hasn't done any or billed for any work yet, client is considering ditching that attorney, since he doesnt appear to want to do any work.....can we deduct the retainer for 2019, then add it back to income in 2020 if he eventually kicks the atty to the curb?


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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2 Replies 2
IRonMaN
Level 15

Cash basis taxpayer - you get the deduction when they paid the fee.  If the can gets kicked the following year, then it is income the following year.

ACME Taxes, Tatoos, Tires and Tomatoes (I had to get rid of the turtles - they kept running away)
Just-Lisa-Now-
Level 15
Level 15

Thanks, just double checking my thinking.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪