The IRS will allow you to deduct legal expenses that you incur in attempting to produce or collect
taxable income or that you pay in connection with the determination,
collection, or refund of any tax.
You can deduct legal
expenses that are:
- Related to either doing or
keeping your job, such as those you paid to defend yourself against
criminal charges arising out of your trade or business,
- For tax advice related to a
divorce if the bill specifies how much is for tax advice and it is
determined in a reasonable way, or
- To collect taxable alimony.
If the attorney fees
are not for one of the purposes (divorce, for example), the legal fees are not
deductible.
In your case, the legal fees are related to your home, not an income producing property. The legal fee is not deductible under these circumstances, unfortunately.
