Can I deduct legal and professional fees?

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Legal and professional fees are deductible when they are ordinary and necessary expenses directly related to the operation of a business or the production of income. For example, fees paid for tax preparation, legal advice for business contracts, or professional services related to your trade are generally deductible. However, personal legal fees, such as those for divorce or personal injury cases, are not deductible. Additionally, legal fees related to the acquisition or sale of property must be capitalized and are not immediately deductible.

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