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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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  #11 (permalink)  
Old 09-18-2012, 10:18 PM
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You have/will claim/ed the amount your lawyer gave you to claim on your taxes, for 2011 it was on line 221...
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Old 09-18-2012, 10:20 PM
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It was claimed in my 2011 tax return already. I just hope it is not flagged or that they don't accept it.
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Old 10-16-2012, 08:22 PM
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Quote:
Originally Posted by Tayken View Post
Hi All,

I know this question comes up often on the forum so I thought this case law and following articles regarding claiming legal fees on line 221 was important. A parent on April 19, 2010 won the right to claim legal fees in an appeal setting forth the case law for tax deductions for a payer of child support to deduct legal fees from their taxes.

The case law is as follows:

Trignani v. The Queen, 2010 TCC 209 (CanLII)
Date: 2010-04-19
Docket: 2008-3989(IT)I
URL: CanLII - 2010 TCC 209 (CanLII)
Citation: Trignani v. The Queen, 2010 TCC 209 (CanLII)

Article in the Lawyers Weekly on the subject:

"Child support payer can deduct legal fees spent on child support bid"
- "Father can deduct even though he has paid, not received, support"

The Lawyers Weekly - May 7, 2010

Another article on the topic:

Child Support Payer can Deduct Legal Fees spent on Child Support Bid
Cristin Schmitz for The Lawyers Weekly
May 7, 2010



Child Support Payer can Deduct Legal Fees spent on Child Support Bid - Canadian-Lawyers.ca

Good Luck!
Tayken
Tayken,

I don't think I am getting this 100% (it has been a long few days). I'm going to try and explain this, and hope it makes sense.

Common law couple split 2002.
Have verbal shared custody agreement.
In 2005 they both sign written agreement (amongst themselves) stating shared custody, with the ex-husband paying cs.
in 2011 husband is relocated due to employment, custody "battle" starts, also includes working out new CS payment, as child stayed with mother until primary custody was determined.

Can the father claim any legal fees associated with the cs? I'm thinking no, but just want to make sure.

Thank you for any feedback!
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Old 10-16-2012, 09:01 PM
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Quote:
Originally Posted by Unevenplayingground View Post
Tayken,

I don't think I am getting this 100% (it has been a long few days). I'm going to try and explain this, and hope it makes sense.

Common law couple split 2002.
Have verbal shared custody agreement.
In 2005 they both sign written agreement (amongst themselves) stating shared custody, with the ex-husband paying cs.
in 2011 husband is relocated due to employment, custody "battle" starts, also includes working out new CS payment, as child stayed with mother until primary custody was determined.

Can the father claim any legal fees associated with the cs? I'm thinking no, but just want to make sure.

Thank you for any feedback!
Hard to say... If the mother is the primary caregiver and custody is with the mother possibly not. Not an expert in this area but, the jurisprudence in support of this article is about 50-50 access and joint custody dispute. So not sure how it could be leveraged in the matter you are describing.

The best person to ask would be a tax lawyer and second best a chartered accountant on the tax Rule.

Good Luck!
Tayken
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Old 10-16-2012, 09:06 PM
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Quote:
Originally Posted by Tayken View Post
Hard to say... If the mother is the primary caregiver and custody is with the mother possibly not. Not an expert in this area but, the jurisprudence in support of this article is about 50-50 access and joint custody dispute. So not sure how it could be leveraged in the matter you are describing.

The best person to ask would be a tax lawyer and second best a chartered accountant on the tax Rule.

Good Luck!
Tayken

Thank you!
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Old 02-23-2013, 10:58 PM
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Default Claim only what is paid or what is billed?

A bit of a different take on this. I know I can claim my legal expenses for establishing child support. I paid a retainer in later 2011 but wasn't billed for most of the services related to that retainer until 2012. I also received a bill for services provided in 2012 that I didn't pay until early 2013. So, can I claim only what I PAID in 2012 or for the services that I was billed?

Similarly, I understand that if I am awarded costs (trial in April) that I'll need to include that as income in my next taxes. But do I actually have to receive the costs from my ex before I need to include it? For example, if I'm awarded costs as $10,000 but don't ever see a dime from my ex, do I still have to include it as income in subsequent years taxes or only include as receive (e.g. $1000 received in 2013, $1000 in 2014 etc)? Thanks for any help!
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Old 02-23-2013, 11:06 PM
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Ask your legal counsel to provide you with a letter outlining what your expenses are related to establishing child support, they will outline it all for you so you can input the tax deduction on your income tax.

I've never heard of costs awarded as being included as income. Costs awarded and paid towards establishing cs needs to be applied to the legal fees you incurred to establish cs though.

Last edited by OhMy; 02-23-2013 at 11:09 PM.
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Old 02-24-2013, 12:08 AM
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I thought I read somewhere that if you claimed the legal fees and then were awarded costs in court -costs that would go against those fees except for the fact you already paid them - then you have to report that at some point. Basically you can't get the tax credit for them and be reimbursed for them via a costs award. Now I'm confused!
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Old 02-24-2013, 12:37 AM
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Expenses should be counted during the period the services were performed regardless of how they are paid.

If you paid a retainer the previous year, you just had an asset and the law firm had a liability.

If you paid the following year, then you had a liability for services performed, it was still an expense for that year. Whether you owe the law firm, or paid with your credit card, you still incurred the expense.

As far as receiving costs, I am not certain how CRA prefers this, but I can find out on Monday. For now, I would suggest that if you claimed the expense in 2012 and received the costs award in 2013, you balance the books by declaring that award as income in 2013. This would only be for the amount you claimed as an expense.
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Old 02-24-2013, 12:52 AM
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Thank you for clarifying that Mess.


Out of curiosity;
If the costs awarded were not only awarded towards establishing CS, but towards other issues or matters in court, how does one go about figuring out which portion of the costs awarded were attributed to establishing CS?
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