Yes and no.

NO-The legal fees related to the divorce itself are
nondeductible personal expenses.

YES-However, the legal fees incurred for obtaining alimony
may be ordinary and necessary expenses for the production
(ie, the creation of gross income) or collection of income.
(Internal Revenue Code section 212(1). If so, they would be
reported on Schedule A, line 22, but the legal fees (along
with any other miscellaneous deductions and job expenses)
must then be greater than 2% of her adjusted gross income to
actually be deductible.

Also, there is a requirement that ABC actually paid the
legal fees, rather than paid by her soon-to-be ex-husband.

Since she is likely a cash-basis taxpayer, then she would
report them in the year paid.

ABC would have to allocate the $5000 of legal fees but I'm
not sure how to determine which fees are for the divorce and
which are for obtaining alimony.

Rudy
www.LizcanoTaxServicesLLC.com

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

ABC is fighiting case for getting divorce and alimony. She
has paid total $5000 towards Legal Fees in year 2005.
However the court has not given yet its final decision. Can
Legal Fee paid towards getting alimony can be claimed as
itemized deduction in her 2005 year return while the case is
still in court and court has not given its final decision.

Your responce is appreciated.

Thanks

D

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >