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Legal Fees As A Deduction From AGI in an Employee Discrimination Suit

  • 1.  Legal Fees As A Deduction From AGI in an Employee Discrimination Suit

    Silver Most Valuable Member
    Posted 03-24-2015 12:20 PM
    This message has been cross posted to the following Discussions: NASSAUSUFFOLK and ncCPAp on the GO! .
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    Per the regs a deduction from AGI is allowed for legal fees paid resulting from an employee discrimination suit.

    The deduction is only allowed to the extent of the income included in the return from the suit or settlement.

    Otherwise the fees are deductible as a MISC. Deduction subject to the 2%.

    My  Issue -  The legal fees were paid in 2014 and the income was received in 2015.

    The regs seem pretty clear. Just wondering if anyone has ever had a similar issue or is there a provision I am missing?

    The tax differential is quite substantial due to the impact of the AMT on the Misc. Deduction.

    Any thoughts?

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    Peter Morse
    CPA
    PETER B. MORSE, CPA
    Huntington NY
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