Are legal fees deductible?

It depends on the nature of the claim for which you incurred those fees. If the claim is personal, such as obtaining a divorce or drafting a will, the legal fees are not deductible. If the fees related to the acquisition of property, such as the purchase of a home, the fees are added to the cost basis of the property. If the fees relate to the production of income, such as obtaining alimony or Social Security benefits, they are tax deductible. Where to claim deductible legal fees also depends. If they relate to an action for discrimination, you can deduct them from gross income. If they relate to the production of income, they are miscellaneous itemized deductions that can be written off only if you itemize your deductions. Separate rules apply to business-related legal fees.