Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
New Member
posted May 31, 2019 7:38:59 PM

Can i deduct lawyer fees paid to collect bad non-business debt?

I got divorced in 2012 and part of the divorce decree that we were responsible for our own debts we incur.  I had an AMEX card, my ex was an authorized user, which I forgot to close (over 4 yrs of non-use on the card).  He charged on the account in April & May 2016 (I was unaware until I received the statement).  I hired a lawyer to try to collect the funds and document w/ a legal contract for his repayment, which he refused to sign or re-pay me.  I had to pay AMEX to keep my credit in good standing.  I am going to write the total amount he charged and issue him a 1099C.  So, can I add the lawyer fees to the 1099C and deduct the lawyer fees associated with the attempted collection?  Thank you!

0 1 1852
1 Replies
New Member
May 31, 2019 7:39:01 PM

You can generally deduct attorney fees paid as a miscellaneous itemized deduction, subject to the 2% floor.

Please see the following IRS website for more information on Form 1099-C before you prepare the form:  https://www.irs.gov/uac/about-form-1099c.