IRS Clarifies Deductibility of Trustee Fees from Trust Income

In a recent notice, the Internal Revenue Service released guidance clarifying that trustee and executor fees may continue to be deducted from a trust or estate’s income after the new tax reform law suspended the deduction of miscellaneous itemized deductions for by individual, trust and estate taxpayers. ABA had requested such clarification on behalf of banks offering fiduciary services to trusts and estates in a letter to the IRS in June. The IRS also requested comments on the effect of the suspension on the ability of a trust beneficiary to deduct amounts comprising an excess deduction upon the termination of a trust or estate.

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Monica C. Meinert

Monica C. Meinert is deputy editor of the ABA Banking Journal and editorial director at the American Bankers Association, where she oversees ABA Daily Newsbytes.