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rakhi.v, Tax Attorney
Category: Tax
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Experience:  Have graduated in Law with specialization & emphasis in Financial Laws and has working experience of over a decade.
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Received a 1099 misc nonprofit and distributed 1099

Customer Question

Received a 1099 misc for myou nonprofit and distributed 1099 misc to nonemployees. Is the remainder 1099 misc income taxable to the nonprofit? Can expenses incurred BY the nonprofit be deducted along with a 179 deduction for a business vehicle purchased? If so where and which forms would I use?
Submitted: 6 months ago.
Category: Tax
Customer: replied 6 months ago.
Have legal fees pertaining to trying to collect monies from a partnership that I left. I won the mediation, but have not been paid. Can I deduct these legal fees, even if I'm asking for the partnership to pay for the legal fees?
Expert:  rakhi.v replied 6 months ago.
Dear Friend,Hello and welcome. Thank you for providing an opportunity to assist you. YES -- 1099 MISC remains reportable and taxable for the non profit. Reporting on Form 1099-MISC is done only when payments are made in the course of your trade or business. Personal payments are not reportable. You are engaged in a trade or business if you operate for gain or profit. However, nonprofit organizations are considered to be engaged in a trade or business and are subject to these reporting requirements. Let us now address the section 179 deduction. This DOES NOT APPLY to Non-profits. This stimulus only applies to "for profit" businesses. It does not apply to non-profits, such as churches, charities or government. Let us now come to Mediation Fees (Legal Fees) issue. Note that Tax Laws do not mention legal fees as tax deductible items. However, much depends upon in what circumstances the fees were paid to be eligible for deductible. On general terms, if I quote a legal resource, for a legal fee to be deductible, the legal and professional fees must be: (i) incurred in carrying on a trade or business; (ii) ordinary and necessary; (iii) reasonable in amount; (iv) paid or incurred during the taxable year in which the taxpayer seeks to deduct them; and (v) paid by the person to whom the services are rendered. In your case, they should be deductible. Please see the very informative and narrative resource below. I am sure this would help. You may please leave a positive rating if this helps as this is the only way we are compensated for assisting you. Alternatively, you may revert back with a reply if you need further assistance or if I have missed out on any aspect of your question. Warm Regards,

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