Leigh Pays the Following Legal and Accounting Fees During the Year

question 47

Multiple Choice

Leigh pays the following legal and accounting fees during the year: $\begin{array}{|l|c|}\hline \text { Legal fees in connection with a contract dispute in her trade or business } & \$ 8,800 \\\hline \text { Legal fees related to resolving a tax deficiency related to business } & 4,000 \\\hline \text { Tax return preparation fees: Allocable to Schedules A and B } & 1,000 \\\hline \text { Tax return preparation fees: Allocable to Schedule C } & 1,200 \\\hline \text { Legal fees incident to a divorce } &5,000 \\\hline\end{array}$ What is the total amount of her for AGI deduction for these fees?

• A)$10,800
• B)$14,000
• C)$15,000
• D)$20,000

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Definitions:

Loaned Out

Refers to funds that have been borrowed out to others, usually by a financial institution.

Usury Law

Legislation that sets maximum interest rates that can be charged on loans, to protect consumers from excessive charges.

Interest Rate

The cost of borrowing money or the reward for saving, typically expressed as a percentage of the principal amount annually.

Equilibrium Rate

The price or level at which supply and demand in a particular market are equal.