What is the name of your state? California
Apologies for length, I wish this weren’t so complicated. In 2018 I won a legal settlement which arose from my eviction from my home and studio, where I meet criteria for using as a home office tax deduction. Not a passive claim, it’s where I do all administrative, store equipment and edit. Rent being what it is in San Francisco, I ended up moving over 30 miles away from the greater majority of my client base. The complicated portion of my question is that my business is creating legal presentations for trial and mediation. Mostly for tenants rights lawyers. I was represented by one of my clients and his firm. AND at the same time I was working for them, helping us to win the larger award we did, BUT not being paid for my services. My work for this case greatly exceeded what I normally do for this client, and included the hiring and supervision of 3rd party service providers, and whose findings were key to winning the decision. Setting aside issues of principal / agent this relationship might involve, can I deduct a 20% pass-through on the initial check issued to me? I received about 2/3 up front and 1/3 structured over the next 5 years (the structured portion I’ve filled tax paperwork for, and will be taxed accordingly the years they’re incurred). Sorry about the longer explanation, I shouldn’t be doing this, but I feel my accountant may be too intimidated by the new tax laws to dig deep into this. Thanks for any reply!
Apologies for length, I wish this weren’t so complicated. In 2018 I won a legal settlement which arose from my eviction from my home and studio, where I meet criteria for using as a home office tax deduction. Not a passive claim, it’s where I do all administrative, store equipment and edit. Rent being what it is in San Francisco, I ended up moving over 30 miles away from the greater majority of my client base. The complicated portion of my question is that my business is creating legal presentations for trial and mediation. Mostly for tenants rights lawyers. I was represented by one of my clients and his firm. AND at the same time I was working for them, helping us to win the larger award we did, BUT not being paid for my services. My work for this case greatly exceeded what I normally do for this client, and included the hiring and supervision of 3rd party service providers, and whose findings were key to winning the decision. Setting aside issues of principal / agent this relationship might involve, can I deduct a 20% pass-through on the initial check issued to me? I received about 2/3 up front and 1/3 structured over the next 5 years (the structured portion I’ve filled tax paperwork for, and will be taxed accordingly the years they’re incurred). Sorry about the longer explanation, I shouldn’t be doing this, but I feel my accountant may be too intimidated by the new tax laws to dig deep into this. Thanks for any reply!