Velma and Bud divorced.Velma's attorney fee of $5,000 is allocated as follows: General representation in obtaining the divorce $1,500 Services in obtaining custody of the child 900 Services in settlement of martial property 600 Determining the tax consequences of: Dependency deduction for child 700 Property settlement 1,300 Of the $5,000 Velma pays to her attorney,the amount she may deduct as an itemized deduction is:
A)$0.
B)$700.
C)$2,000.
D)$5,000.
E)None of the above.

Question

Velma and Bud divorced.Velma's attorney fee of $5,000 is allocated as follows: General representation in obtaining the divorce $1,500 Services in obtaining custody of the child 900 Services in settlement of martial property 600 Determining the tax consequences of: Dependency deduction for child 700 Property settlement 1,300 ​ Of the $5,000 Velma pays to her attorney,the amount she may deduct as an itemized deduction is:
A)$0.
B)$700.
C)$2,000.
D)$5,000.
E)None of the above.

Quizplus · Accepted Answer

Velma can only deduct the fees related to tax advice, which is $2,000 ($700 for dependency deduction and $1,300 for property settlement). The fees related to obtaining the divorce and custody of the child are considered personal and not deductible as itemized deductions on her tax return. Therefore, the total deductible amount is $2,000.

Velma and Bud Divorced