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A professional inquired whether uncollected legal costs after one year could be deducted as a capital loss. The DGT ruled that, as these costs are linked to their economic activity, they must be taxed under the rules for income from economic activities rather than as capital losses.
This ruling clarifies that professional legal expenses must be treated as business deductions rather than capital losses, affecting how professionals manage uncollected litigation costs for tax purposes.
The tax team reviews your specific situation.
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