ABA Comments on IRS Proposal on Trust and Estate Deductions

In a comment letter last week, ABA offered feedback on a recent IRS proposal to address the treatment of deductions by non-grantor trusts and estates after changes made by the 2018 tax reform law. ABA supported the proposal’s clarification that deductions made pursuant to section 67(e) of the Internal Revenue Code, such as fees charged by banks acting as trustee or executor, are not disallowed by the temporary suspension of miscellaneous itemized deductions imposed under 67(g).

ABA also provided suggestions on additional guidance, such as changes to Schedule K-1, to facilitate compliance with the treatment of deductions in excess of gross income succeeded to by a beneficiary on the termination of an estate or non-grantor trust.