Kegger1
Returning Member

Legal Fees

In 2021 we went to court to collect $45,000 in past due debt and agreed to accept $40,000 as payment in full.  I know the $5,000 is considered a bad debt and can be deducted, but what about the $2,300 we spent on a lawyer and court fees is that part of the bad debt or does that fall under legal fees and is not deductible?