Trusts and estates are permitted certain deductions
The IRS issued proposed regulations to clarify that certain deductions are allowed to an estate or nongrantor trust because they are not miscellaneous itemized deductions.
Expenses & Deductions
Unexpected tax bills for simple trusts after tax reform
Post-TCJA, expenses that are miscellaneous itemized deductions are taken into account in computing trust accounting income but are now nondeductible in computing taxable income and distributable net income for the trust.
Clarification of itemized deductions for trusts and estates
Regulations are anticipated to clarify that the costs of trust or estate administration that are deductible under Sec. 67(e)(1) are not miscellaneous itemized deductions and, therefore, their deductibility has not been suspended by Sec. 67(g).
IRS notice permits recalculation of marital deductions for same-sex couples
The IRS provided the procedures same-sex married couples should use to recalculate the transfer-tax treatment for property transferred to spouses.
Estate Can Take Theft Loss Deduction Related to Madoff Ponzi Scheme
An estate could take a theft loss deduction where a Ponzi scheme rendered an interest in an LLC the estate owned worthless.
Estimated Amount of State Income Tax Claim Not Deductible on Estate Tax Return
The Ninth Circuit held that an estate could deduct as a claim against it only the amount of state income tax and interest with respect to the income on a transaction that the estate ultimately paid, not the amount that it estimated at the time of the decedent’s death it would have to pay on the income.
Estate May Deduct Interest on Loan Between Two Trusts
The Tax Court held that an estate could deduct as an administration expense interest incurred when a trust that was part of the estate borrowed funds to enable the estate to pay its federal estate tax.
