Tax question: Lawyer Fee Deduction?

Yes, it's correct. The deduction is not taken directly against the taxable IRA distribution, though. The distribution is reported on Form 1040. The deduction is taken on Form 1040 Schedule A under 'Miscellaneous expenses'. Unfortunately, any miscellaneous expenses are subject to the 2% rule. You have to subtract 2% of your Adjusted Gross Income from Form 1040 from your total miscellaneous Schedule A items, and you get to deduct whatever is above that 2%. In many cases, the 2% wipes out any tax savings. Unless your legal fees were substantial, you may not benefit, But it's worth figuring.