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Itemized Deductions Schedule-A


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Old 03-17-2013, 07:39 PM
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How to deduct expenses related to lending money

I invest money with a mortgage company that uses the funds to provide mortgages for homeowner loans, construction loans, etc. Money from multiple investors is pooled for these loans. The interest that I receive I list on schedule B.

The mortgage company recently foreclosed on a property in which I am an investor. I had direct expenses due to lawyer fees. I'm not sure where to deduct these expenses.

Do I deduct these expenses on Schedule A where they are subject to the 2% AGI limitation (Other Investment Expenses)?



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Old 03-17-2013, 11:26 PM
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“The interest that I receive I list on schedule B.”=== According to the IRS,, you must file Sch B of 1040 if your taxable interest or ordinary dividends received totaled over $1.5K.




The mortgage company recently foreclosed on a property in which I am an investor. I had direct expenses due to lawyer fees. I'm not sure where to deduct these expenses.

“Do I deduct these expenses on Schedule A where they are subject to the 2% AGI limitation (Other Investment Expenses)?”========= A variety of legal fees count as miscellaneous deductions on your income tax return. You can deduct legal expenses that relate to keeping your job as well as any legal fees that relate to the production of taxable income. You must deduct attorney fees as itemized deductions on your 1040 using sch A; report your deductions for attorney fees as miscellaneous deductions on lines 21 through 23 and the total amount on line 24 of Form 1040. Tax deductions for attorney fees are limited by the 2 percent rule. You can only deduct the amount of their attorney fees that are more than 2 percent of you AGI. The amount of your AGI is the amount listed on line 38 of your form 1040.



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