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Visitor I

Legal fees associated with defamation lawsuit

WRT, settlement of defamation suit, received settlement.  Half in December 2017, half in January 2018 (net of legal fees).  Any thoughts on a basis to claim all legal fees in 2017? Any thoughts on way to justifiably deducting legal fees in 2018, in light of the new tax law?

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TurboTax Specialist

Legal fees associated with defamation lawsuit

For a cash-basis taxpayer deductible legal fees are claimed on the tax return corresponding to the year they were paid, so fees paid in 2017 belong on a 2017 tax return.