Question

Carla paid her lawyer the following amounts during 2017. 5000 for representation during a divorce , 800 to prepare her will and 3000 for assistance in obtaining alimony . How much in legal fees can Carla claim?

800

3000

5000

8000

2. Sofia filed her 2016 return on Nov 1 , 2017 she did not have a valid extension of time to file. In which of the following situation would she most likely qualify for a penalty exception?

Sofia lost her job in March of 2017 and had insufficient funds to pay the taxes due. She got a new job in Oct of 2017 and filed on Nov 1 a few days after she received her first paycheck.

Sofia was out of town from April 12 until Oct 28 on a temporary assignment for her job. She left her tax records at home and needs to wait until she returned home and had access to these records.

Sofia was in a car accident on March 13. Se remained hospitalized for her injuries until Oct 23

Sofia is part of an activist group that believes that federal taxation of income is unconstitutional and that , as a sovereign citizen she is not subject to an income tax. She delayed filing a return until she was contacted by IRS.

Answer 1

1st question

Deduction will be given for those items which can produce taxable income ,

You will not get deduction with respect to items which not produce taxable income , and regarding personal matters you can't get deduction

5000 paid to lawyer for representation of divorce will not be deductible , as it related to personal maters and can't produce any taxable income .

800 paid to prepare will is also her personal matter , so can't get deduction

3000 paid to lawyer for getting assisstance in obtaining alimony will produce taxable income

Same can be claimed as "miscellaneous itemized expense " in form 1040 under schedule A

2nd question

Penalty exception. will be given only for reasonable cause

Reasonble cause is depends on all facts and circumstances

Sofia met in car accident before due date of filling of return and she hospitalized until october 23 , will be considered as reasonable cause for penalty exception . in the case this only there most likely to qualify for penalty expection

Remaining options will not be fit for reasonable cause .