@bearyg1833 wrote:
I figured out a way to do it, but I'm not sure it is correct. What I did was go to Forms and open 1040/1040 SR Wks. I scrolled down to the Schedule 1 section and went to Part III "Adjustments to Income". Under line 21 in the section "Other Adjustments to Income Smart Worksheet", I went to Line H and wrote in "Legal Fees to sue the City of XYZ" and added the legal fee amount to the right. The information is then carried forward to Schedule 1 line 22 and is listed on the "......." line. The amount is then added to total for adjustments to income.
Is this the correct way to do it? I've also read "(please consult with your tax specialist about how to properly identify the deduction as specific acronyms exist for different deductions)." Is there a special acronym that I'm supposed to use to identify this? Thank you for your help. It is much appreciated.
You did a good job of figuring it out except the IRS says to enter "UDC" next to line 22, but the smart work sheet line H is the correct place to put it.
For reference see the 1040 instructions for Schedule 1, line 22 https://www.irs.gov/pub/irs-pdf/i1040gi.pdf page 90
Attorney fees and court costs for
actions involving certain unlawful discrimination
claims, but only to the extent
of gross income from such actions
(see Pub. 525). Identify as “UDC.”
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
