Are the fees I paid my bankruptcy lawyer and trustee tax deductible?
Wednesday, December 2nd, 2009 at
11:02 am
I filed bankruptcy paying buying online drugs over 3k to my lawyer and fees to the Bankruptcy courts are any of these fees tax deductible?
Thanks,
For those of you who have the smart stupid remarks the bankrupcty i filed was a chapter 13 which means everyone was paid back. So I didnt get over on anyone or get forgived of any debt.
At first blush those legal expenses would appear to be personal legal expenses and therefore not deductible. However if you were able to make a case that your bankruptcy was an effort to produce taxable income it would be deductible. It would require very careful understanding of the nature of your bankruptcy proceeding to make such a case. If you are self employed and the bankruptcy is directly related to that activity you could have an argument.
As for you being concerned about cancellation of debt as income bankruptcy is an exception. You may have some adjustments to basis of any property that you retain on which debt was canceled.
If you would like to learn more about this check out IRS Publication 908 at the following link.
http://www.irs.gov/pub/irs-pdf/p908.pdf
No. You essentially got money for free by filing for bankruptcy and not having to repay the money you borrowed. The government isn’t going to give you any more freebies. Those fees should have been deducted from your estate.
yes
Don’t you think you’ve already taken enough of a free ride for your bad choices? Pay all your taxes please.
Maybe
No they are not. On the contrary debt forgiven by your creditors is taxable. So, they might be sending you a form advising you of this, they would also report it to the IRS. You should ask your lawyer.