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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10172
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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My name is***** I am the California Court appointed

Customer Question

Hi. My name is***** I am the California Court appointed conservator for my mother who is in an alzheimers home. I incur attorney fees each year to prepare the report to the court, and I am required to post a bond each year as well. I pay those out of my mother's assets. I am preparing my mother's tax return and wonder if either is deductible on her tax return? Thanks
JA: Thanks. Can you give me any more details about your issue?
Customer: Not too much. The important thing is that I pay attorney fees to prepare the annual report required by the Court that granted me conservatorship over her person and estate and bond fees both from my mother's assets. Are those fees deductible on her tax return? She lives in California in an Alzheimers nursing home.
JA: OK got it. Last thing — Tax Professionals generally expect a deposit of about $32 to help with your type of question (you only pay if satisfied). Now I'm going to take you to a page to place a secure deposit with JustAnswer. Don't worry, this chat is saved. After that, we will finish helping you.
Submitted: 8 months ago.
Category: Tax
Expert:  Lane replied 8 months ago.
Hi,... For tax purposes, these fees can be deductible only to the extent they can relate to deductible activities (and at this point in time, there are no cases or IRS rulings on the issue)....If the guardian is handling the person’s financial affairs and collects income on the person’s behalf, I would recommend that the portion of fees related to this activity can be characterized as a deductible expense under Code Sec. 212....Further, a guardian or conservator’s fees can also be treated as a deductible medical expense, if a guardian needs to go to court to have the impaired person committed to a medical facility. The extent of fees related to this activity may arguably be characterized as a medical expense deductible by the impaired person who pays them....Because medical expense are are only deductible over 7.5% of AGI (for someone this age), the income argument would generate the higher net deduction.
Expert:  Lane replied 8 months ago.
Since personal attorney fees are a miscellaneous itemized deduction, they are limited by the two percent rule:...They are deductible only if, and to the extent, they (along with all your other miscellaneous deductions, if any) exceed 2% of your adjusted gross income (AGI)....For example, if your AGI is $100,000 your attorney fees are deductible only if, and to the extent, they, and any other miscellaneous deductions you have, exceed $2,000 (2% of $100,000 is $2,000).
Expert:  Lane replied 8 months ago.
I hope this has helped....Please let me know if you have any questions at all....If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the faces or stars on your screen, and then clicking “submit”) That’s the only way JustAnswer will credit us for the work here....Thank you!Lane……I hold a law degree (JD, Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security/Medicare, estate, corporate & tax advice since 1986.

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