Can I write off $4,000.00 for an adverse possession claim?

[mjarvis60]

We just filed a claim defended title with the registry of deeds. Can I write off the $4,000.00 fee for the adverse possession?

[RichardG]

Was the claim related to trade or business property or your personal residence?

[mjarvis60]

Personal residence, lots of land that was illegally divided many years ago.

[mjarvis60]

Thank You very much!

[RichardG · Accepted solution]

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.