![]() If you’re a professional trustee, this income is also subject to Self-Employment Tax. You must declare these fees on your Form 1040, where you place them on line 21, Other Income. Trustee fees are an income tax deduction for the trust but taxable income to you. Investment fees, custodial fees, trust administration fees, and other expenses you paid for managing your invest- ments that produce taxable income are miscellaneous itemized deductions and are no longer deductible. After the section on deductions is complete you’ll get to the kicker – taxes and payments. On Form 1041, you can claim deductions for expenses such as attorney, accountant and return preparer fees, fiduciary fees and itemized deductions. What administrative expenses are deductible on Form 1041? Generally, because charges you incur in creating and implementing an estate plan - including attorney’s fees - are considered personal expenses, you cannot deduct them for income tax purposes. This article reviews the deductibility of fees for individuals (on IRS Form 1040) and for trusts (IRS Form 1041). Some or all of the distributions made to the beneficiaries of the trust. What expenses are deductible on a trust tax return?Īllowable income tax deductions Repairs to real estate held by the trust. 8 What happens to excess deductions when a trust is terminated?.7 Are fiduciary fees still deductible under the new tax law?.6 Are investment management fees tax deductible in 2020 for trusts?.2 What administrative expenses are deductible on Form 1041?.1 What expenses are deductible on a trust tax return?.
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