Welcome back! Ask questions, get answers, and join our large community of tax professionals.
Showing results for 
Search instead for 
Did you mean: 

My client received a 1099-misc form for "lemon law" settlement and also the attorney fees are part of box 3. how do I deduct the attorney fees?

Level 1
Form 1099-Misc, box 3 $73,75.96
Actual money received in a check $50,625.50 
Attorney fees $23130.50
0 Cheers
4 Comments 4
Level 15
Level 15
Hopefully they didn't spend it all and can pay the taxes on that 73k.

TCJA took away the ability to deduct most personal legal fees.


Level 14
Level 14

Don't forget only the amount over the price of the car is taxable, and as Lisa  said the attorney fees are not deductible

Level 9

Make an adjustment on the Actual Money received line to subtract the amount the client is out of pocket (originally paid for the car).

0 Cheers
Level 15