Discussion:Legal Fees Paid for Ongoing Settlement Negotiations
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Revision as of 12:42, 8 April 2008
Discussion Forum Index --> Advanced Tax Questions --> Legal Fees Paid for Ongoing Settlement Negotiations
Discussion Forum Index --> Tax Questions --> Legal Fees Paid for Ongoing Settlement Negotiations
| 8 April 2008 | |
| Client is dealing with a sexual harassment claim with a former employer. I understand the taxability matter of reporting income upon settlement. Further, in this situation, legal fees are deductible above-the-line, on Form 1040, Line 36 as "UDC."
My question is - We have $50k of legal fees paid in 2007...and the large settlement to be received by client will not be received until mid 2008. Would anyone recommend waiting for the deduction until the receipt of the settlement during 2008? That would provide the best matching of income and expense (although we know individuals are typically cash basis taxpayers) and is desired in this specific case. Any thoughts are much appreciated. | |
