Question

business legal fees and settlement

Forum|Forum|5 years ago
February 11, 2021
1 reply
0 views

I had a contract breached by company and sued. My legal and professional fees were paid in 2020 and after winning lawsuit, was paid in 2021. Is is possible to defer those legal and professional fees to 2021 as I expect to receive a 1099-NEC for the payment.

TurboTax Home & Biz Windows

G

gloriah5200

If your professional and legal fees paid in 2020 were paid to the attorney's office but put into an escrow account until the lawsuit was settled, then the fees may not actually be paid until the settlement was made.

Ask your attorney if that was the case...if so, then hopefully you can deduct it in 2021 against the award.

T

tnatorAuthor

Fees were paid to American Arbitration Association and had to be paid in advance prior to advancing to arbitrator with case.

A

AlanT222

You must claim your business expenses the year the expense was incurred. Since you paid the expense in 2020, it must be claimed on your 2020 income tax return.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"