Unfortunately you cannot deduct the legal fees for terminating a timeshare used for personal-use. If this had been an active rental property, you may be able to deduct some of the legal costs.
As a general rule, you can only deduct legal fees that were incurred in generating taxable income (see the following examples).
Legal Fees you can deduct:
- Court costs and attorney fees related to either doing or keeping your job, including back pay, injury to reputation, and unlawful discrimination claims
- Costs of collecting taxable alimony or arranging details of alimony payments
- Fees for tax advice related to a divorce, if the bill specifies how much is for tax advice. You cannot deduct any other legal fees related to a divorce or child support since they are personal expenses not related to taxable income.
- Fees for personal injury actions where you recover taxable damages
- Estate tax planning fees related to tax planning or income-producing property
- Costs of collecting taxable Social Security benefits
- Fees to recover income-producing property such as stocks or bonds loaned as collateral
