All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

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Pioneer
Posts: 2
Registered: ‎05-12-2017
Accepted Solution

Settlement payments

Can settlement payments (out of court) made to a buyer/client as a result of negligence/omission by the real estate agent be considered business expense/deduction?

Tax Pro
Posts: 5,806
Registered: ‎02-23-2016

Re: Settlement payments

Hi kceniav,

 

Welcome to the H&R Block community.

 

Yes, settling with a client when something is messed up or the client is mistreated is a cost of doing business.  Even a court-ordered settlement paid by your business is a cost to the business.  I would put this type of cost in the "other" section in Part V of Schedule C if you are a proprietor or you own a single-owner LLC.  If your business is a partnership or a corporation the expense will be reported on the form (1065, 1120S, etc.) that you file for the business.

 

If you have any other questions I'll be glad to help.

 

Louis,

Senior Tax Advisor (Tampa, FL)

Pioneer
Posts: 2
Registered: ‎05-12-2017

Re: Settlement payments

THANK YOU!

Tax Pro
Posts: 5,806
Registered: ‎02-23-2016

Re: Settlement payments

Welcome.