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You can usually 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:
If the attorney fees are not for one of the purposes (divorce, for example), the legal fees are not deductible.
In your case, it appears the question turns on whether the dispute could lead to the collection of taxable income. If this is rental, trade or business, or investment property, the answer is yes, the legal fees are deductible. If this is your home or other property not held as an investment or trade or business, then the answer is no.
You can usually 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:
If the attorney fees are not for one of the purposes (divorce, for example), the legal fees are not deductible.
In your case, it appears the question turns on whether the dispute could lead to the collection of taxable income. If this is rental, trade or business, or investment property, the answer is yes, the legal fees are deductible. If this is your home or other property not held as an investment or trade or business, then the answer is no.
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