Discussion:Copyright infringement
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Discussion Forum Index --> Basic Tax Questions --> Copyright infringement
Discussion Forum Index --> Tax Questions --> Copyright infringement
| 25 June 2008 | |
| Have a tax client who has paid a legal fine for copyright infringement. Is this payment tax deductible on the 2008 return? It's a 2 member LLC. Thanks. | |
| June 25, 2008 | |
| Was it a fine (a criminal sanction) or just damages in a civil suit? | |
| 27 June 2008 | |
| Have additional info. Never reached courts. Client used a copyrighted image on their website without authorization or permission. Client then contacted by phone; agreed to pay a dollar amount ($800!) to settle the issue before it progressed any further.
Deductible? | |
| 27 June 2008 | |
| Was there any documentation? Is your client still using the image after he paid $800? Might be a fee for the rights to use the image =). | |
| 27 June 2008 | |
| Your client probably handled this herself. In the future, if anything like this comes up, I'd advise her to get a release signed by the party she's paying damages to(this is a separate document from the check). I'd be better if a lawyer prepared it, but there are examples on the net.
It's an out-of-court settlement arising out of normal business operations, and in my opinion, is directly connected to her business. So, I'd say it's deductible. Some might question whether the expense is normal. I think that is a pretty liberal standard. She could have merely been negligent. | |
| 27 June 2008 | |
| Pegoo, the client was running an internet business, and has now closed the business. No longer using the image. Thanks to all for your help. | |
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