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    Legal fees

    BBmack
    Level 1
    ‎07-01-2020 11:05 PM

    H & W sold business assets of a corporation for cash and liquidated the corporation in 2016. In 2019 Buyer sues H & W alleging misrepresentation of sales (claim is bogus) and H & W have to hire attorney and they pay him $30,000 in 2019 for defending them. Case is still going on in 2020.

    Can they deduct the legal fees as an expense on schedule C or as a capital loss in 2019? Any help is appreciated.

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    1 Comment 1
    dkh
    Level 15
    ‎07-03-2020 06:29 PM

    Try IRS Pub 529, page 5 - Legal Expenses

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