I am soon to receive proceeds from the recent sale of a family-owned home due to a bankruptcy filing by one of my siblings. I attempted to challenge the sale of the home with an attorney but ultimately decided to let it go to the trustee in my sibling’s bankruptcy to sell it.
My question: are the fees I paid for the attorney to defend me in the bankruptcy case tax deductible? I am going to pay the attorney out of the proceeds but wonder if they can be deducted. Also, if they can be deducted, what documentation will I need beside a final bill from the attorney to support the deduction if allowed? Is this something that will be easy to fill in within the TT software (I usually use Premier).
I am a resident of Georgia but the home is located in New York State (New York City to be more precise) if that makes a difference.
Thanks.
