Why are plaintiffs’ contingent-fee lawyers treated differently than other businesses in America when it comes to tax deduction of ordinary business expenses?
Recently our firm paid for a deposition transcript for a contingent-fee case we are prosecuting. That transcript is necessary to successfully pursue the case. Should we be able to deduct the cost from taxable income as an ordinary and necessary business expense this year? Absolutely. Logic dictates that all costs, including the cost for the deposition transcript, are ordinary and necessary business expenses that should be deductible as soon as they are incurred. Can we? That’s not so certain.
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