Velma and Josh divorced. Velma's attorney fee of $4,000 is allocated as follows: Of the $4,000 Velma pays to her attorney, the amount she may deduct as an itemized deduction is:
A)$0.
B)$1,100.
C)$2,800.
D)$4,000.
E)None of the above.

Question

Velma and Josh divorced. Velma's attorney fee of $4,000 is allocated as follows:  Of the $4,000 Velma pays to her attorney, the amount she may deduct as an itemized deduction is:
A)$0. 
B)$1,100. 
C)$2,800. 
D)$4,000. 
E)None of the above.

Quizplus · Accepted Answer

Velma can only deduct the portion of her attorney fee that relates to tax advice or assistance with the tax implications of the divorce. According to the allocation shown in the question, $1,100 of the total fee is allocated to tax advice or assistance (11/33 x $4,000 = $1,100). Therefore, the amount Velma may deduct as an itemized deduction is $1,100.

Velma and Josh Divorced