Discussion:1041 Expenses
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Discussion Forum Index --> Basic Tax Questions --> 1041 Expenses
Discussion Forum Index --> Tax Questions --> 1041 Expenses
Pamikkelsen (talk|edits) said: | 3 March 2008 |
| For a complex trust, on which (Form 1041) line does one show trust account maintenance fees. These expenses would not be incurred if the trust did not exist. According to one source, that would place them on Line 15a. Would like to confirm... | |
RoyDaleOne (talk|edits) said: | 3 March 2008 |
| What are "trust account maintenance fees", are they from a brokage house, bank? | |
Pamikkelsen (talk|edits) said: | 3 March 2008 |
| From a bank. Account maintenance & investment sweep fees. | |
| 3 March 2008 | |
| 2% items if a 1040 would have had similar fees and be subject to 2% of AGI on Sch A | |
Pamikkelsen (talk|edits) said: | 3 March 2008 |
| That's the way I classified the expenses initially. But read an opinion that called it into question. Thanks for the feedback. | |
Michaelstar (talk|edits) said: | 3 March 2008 |
| The AICPA has also released some guidance in this area that might be helpful for you to read and also keep as backup documentation in your file. It also explains the reasoning behind Kevin's answer. | |
Michaelstar (talk|edits) said: | 3 March 2008 |
| That is sited in the link | |
Pamikkelsen (talk|edits) said: | 3 March 2008 |
| This is extremely helpful! But here's one last question, for the sake of argument. Assume that under the bank rules, the (investment & operating) accounts for the trust must reside in the small business department, which carries a less-than-flexible fee structure. And let's assume, given the balances involved, that an individual might incur substantially lower fees, or perhaps no fees at all. Does that make a difference? | |
| 3 March 2008 | |
| Michael, I had posted before reading link, sorry. You were correct, Knight affirms Rudkin.
Pam, NO it doesn't make a difference, the one good thing is that 2% is 2% is 2% | |
Pamikkelsen (talk|edits) said: | 3 March 2008 |
| Actually, I was not questioning the threshold. I was referring to this:
"Based on the Supreme Court’s reading of IRC Section 67(e)(1), investment advisory fees paid by the trust to an investment advisor are subject to the 2-percent floor unless the trustee can show that there is an “…incremental cost of expert advice beyond what would normally be required for the ordinary taxpayer…” or that the “…investment advisor [] impos[ed] a special, additional charge applicable only to its fiduciary accounts" I believe it's true, as I wrote above, that the fees would be substantially less for an individual in this particular scenario. However, I don't think the benefit is sufficient in this case. So, I will not reclassify the expenses. Thank you all for your feedback... | |
