legal expenses deductibility

• Deductibility of legal expenses in corporate reorganizations.

Case law provides an exception to the general nondeductibility of legal expenses incurred in corporate reorganization when the corporation is able to show that the reorganization will not result in substantial future benefits. The rationale is that capitalization should only be used when the benefits related to the costs incurred are long-term. Courts have been more receptive to current deductions for divestments than for acquisitions. Failed reorganization attempts can result in current deduction of expenses if no successful reorganization is forthcoming.

• The Tax Adviser
• Vol. 25 Nbr. 10, October 1994

• Commissioner v. Banks, 543 U.S. ___ (2005)

...First, taking the legal expenses as miscellaneous itemized deductions woul... first concerns the general issue of deductibility. For the tax years in question the legal expenses ...

• U.S. Supreme Court

• United States v. Gilmore, 372 U.S. 39 (1963)

... the years 1953 and 1954, on the ground that legal expenses incurred by him in defending divorce liti...The case before us involves the deductibility for federal income tax purposes of that part of th...

• U.S. Supreme Court

• Small Business Taxation @ Gowlings - July 11, 2011.

Deductibility Of Legal Expenses Incurred To Defend Against Emplo...

• Mondaq Business Briefing
• Nbr. 2011, January 2011

• Stephen A. Lenn and Ksenia Lenn, (1998)

... to deduct the tuition costs as medical expenses under sec. 213, I.R.C. P claimed a deduction for tthe legal expenses incurred in the lawsuit against the publi...In considering the deductibility of expenses that are not purely medical in nature,...

• United States Tax Court

• Celebrity deductions: case law provides guidance for celebrities looking to deduct legal fees.

...DEDUCTIBILITY OF LEGAL FEES . Legal expenses are deductible as "...

• California CPA
• Vol. 75 Nbr. 3, September 2006

• United States v. Davis, 370 U.S. 65 (1962)

... transfer of property in satisfaction of a legal obligation. Pp. 68-71. 2. On the record in this c... prior to divorce, as well as the deductibility of his payment of her legal expenses in connection...

• U.S. Supreme Court

• Gurnee Munn, Jr. v. the United States., 455 F.2d 1028 (Fed. Cir. 1972)

... with deducibility or nondeductibility of legal expenses under section 212 of the Internal Revenue... the parties' differences over the deductibility of the legal expenses incurred in connection with ...

• Federal Circuits

• Glenn Patrick Bogue, (2011)

... to deduct certain transportation expenses for travel between his residence and worksites dur... 2005, petitioner claimed a deduction for legal expenses of $1,250. That amount also included $800...Tellier, 383 U.S. 687 (1966). The deductibility of legal expenses is determined by looking at the ...

• United States Tax Court

• T.D. 9125

D. 9125, under Section 221, provides rules for the treatment of interest paid on a qualified education loan during the taxable year. The regulations clarify that qualified education interest includes capitalized interest and other amounts charged for the use or forbearance of money. The regulations also amend the transition period in the regulations under Section 6050S to provide that information reporting is not required for loan origination fees and capitalized interest on loans made before September 1, 2004.

... requested guidance on the deductibility of interest paid on a qualified education loan if ... taxpayer solely to pay higher education expenses that are paid within a reasonable period of time b... qualified education loan, the student is legally obligated to make interest payments under the term...

• United States. Internal Revenue Bulletin
• July 30, 2009