The query of whether or not bills paid to authorized counsel throughout dissolution proceedings could be claimed as a tax discount is a frequent concern. Typically, funds made for authorized companies associated to a divorce are thought of private bills and aren’t deductible on federal revenue tax returns. An instance could be charges particularly for acquiring the divorce decree itself or for negotiating youngster custody preparations.
Understanding the nuances of tax regulation on this space is essential for these present process separation. Whereas direct charges associated to the divorce are sometimes non-deductible, particular parts of these funds might qualify for a deduction if they’re instantly associated to the manufacturing or assortment of taxable revenue. This differentiation stems from the precept that bills incurred to handle or shield income-producing belongings can, in some circumstances, be thought of deductible. This precept has historic precedent in tax court docket rulings and IRS steerage.
