Answer: The IRS allows deduction of your legal fees and costs, only if the estate planning related to “income”. More specifically, costs in relation to the following are allowed as a deduction:
- The production or collection of income;
- The management, conservation or maintenance of property held by the taxpayer for the production of income, or
- The determination, collection or refund of any tax.
Blogger and Attorney Barbara Ann Dalvano advises the legal fee for drafting a Will is not normally tax deductible. But, if your attorney created a Trust to hold title to “income producing property”, a portion of the legal fees involved may qualify as deductible.
As always, confer with a CPA to obtain the latest advice on such tax matters.
Attorney James Haroutunian practices real estate, estate planning and business law in Billerica at 630 Boston Rd and can be reached with questions at 978-671-0711 or via email: James@hlawoffice.com.