In general legal fees for the production or protection of investments (that generate taxable income
) are a miscellaneous itemized deduction
on Schedule A
for an individual
"You can deduct certain other expenses as miscellaneous itemized deductions subject to the 2%-of-adjusted-gross-income
limit. On Schedule A (Form 1040
), line 23, or Schedule A (Form
1040NR), line 9, you can deduct the ordinary and necessary expenses that you pay:
To produce or collect income that must be included in your gross income
To manage, conserve, or maintain property
held for producing such income, or
To determine, contest, pay, or claim a refund of any tax
You can deduct expenses you pay for the purposes in (1) and (2) above only if they are reasonable and closely related to these purposes."
Also, theft loss is available for items that were stolen.
If you must to pay a legal fee to recover stolen property, an individual can deduct the legal fee as part of the theft loss on Form 4684
So, reasonable legal fees for investments are generally deductible and fees to recover stolen property are included in the theft loss claim.
Please ask if you need more discussion or information.