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Two questions on federal tax deductibility: 1. We personally…

Two questions on federal tax...
Two questions on federal tax deductibility:
1. We personally paid legal fees for our manufacturer C Corp. The fees were for assistance in preparing a Research &
Development tax credit application. Can we deduct the fees on our personal return and if so would it be on Sch A.?2. How do we write off an investment in a partnership that is now worthless? Also, we did not get a K-1 for last year.
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Answered in 10 minutes by:
10/16/2017
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 13,530
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Verified

Hi. My name's Lane

...

I hold a law degree (J.D.), with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice 1986

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Yes, legal fees for business, income production, protection of business or ANYTHING tax related are deductible. And yes, if paid personally, would be schedule A subject to the 2% floor.

...

ON your second question, this is a capital loss, to the extent that you contributed capital. Report on 8949 flowing to schedule D.You report this just as you would the sale or disposition of other capital assets.

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Customer reply replied 4 months ago
Got it on legal fees.
On the capital loss how the I handle the ending capital balance of $200 plus from the 2015 K-1 - the last one received.

And distribution (which is what that is) reduces your capital loss.

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it's your OUTSIDE basis that forms the "basis," for the loss.

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Outside basis is a little different from capital account.

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I'm attaching an excellent worksheet for reconstructing that, if you haven't tracked:

Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 13,530
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Lane and 87 other Tax Specialists are ready to help you
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Customer reply replied 4 months ago
Great, thanks.
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Lane
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 13,530
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Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986

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