Can a owner of rental property deduct workers compensation claims as a result of a law suit?

[abctax55]

PLEASE stop bombarding us with the same question every few minutes, OK?

Give folks a chance to answer (if anyone is so inclined...)

[itonewbie]

If your client was ordered to pay workers' compensation by the court, the presumption is that there are legal grounds for the landlord to carry that liability.  On that basis, the cost would generally be considered ordinary and necessary, except to the extent fines and/or punitive damages were included.  You should probably review the case and settlement in more details to determine the extent to which the cost may be deductible.

[itonewbie]

You should also consider whether any of the workers compensation is allocable to jobs that require capitalization, in which case, the relevant portion may need to be capitalized and not be currently deductible.

[George4Tacks]

Hi there,

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Cheers!