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Post by bookeater on Apr 3, 2011 18:38:38 GMT -5
Can you deduct all or any portion of fees paid to an attorney for a loan modification not obtained (company went bankrupt)?
Thanks
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Post by commentator on Apr 3, 2011 22:49:02 GMT -5
You might be able to argue that you have a bad debt loss. If it was a personal loan, that would be classified as a short term capital loss.
If it was a business loan the loss is clearly deductible against ordinary income.
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Post by bookeater on Apr 5, 2011 12:04:11 GMT -5
Thanks, commentator.
I am sticking to my original inclination. The loss is not deductible because it was not a loan, and it does not protect income producing property. It also does not fall under legal fees (the person in question paid an attorney to help them get a loan mod) because it does not fit any of the scenarios where it is an allowable deduction.
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