IRS Extends Guidance on Trustee Fees


The IRS announced that it is extending interim guidance on the treatment of investment advisory fees and other costs subject to the 2% floor under IRC § 67(a) (Notice 2011-37). Under the notice, nongrantor trusts and estates will not be required to unbundle their fiduciary fees to determine what portion is subject to the 2% threshold for itemized deductions. Instead, taxpayers will be allowed to deduct the full amount of bundled fiduciary fees without regard to the 2% floor.

 

The notice extends treatment that was originally issued in Notice 2008-32, effective for tax years beginning before Jan. 1, 2008. Subsequent notices extended the treatment to years beginning before Jan. 1, 2009, and then Jan. 1, 2010. Notice 2011-37 abandons the approach of extending the treatment one year at a time and extends it to any tax year beginning before the date final regulations under Treas. Reg. § 1.67-4 are published in the Federal Register.

 

The IRS and the Treasury Department intend to conform the regulations to the Supreme Court’s decision in Michael J. Knight, Trustee of William L. Rudkin Testamentary Trust v. Commissioner, 552 U.S. 181 (2008), but so far have not done so.

 

More from the JofA:

 

 Find us on Facebook  |   Follow us on Twitter  |   View JofA videos

SPONSORED REPORT

How the election may affect taxation of business income

This report summarizes recent proposals to reform the U.S. business income tax system and considers the path to enactment of any such legislation.

VIDEO

How to Excel pivot a general ledger

The general ledger is a vast historical data archive of your company's financial activities, including revenue, expenses, adjustments, and account balances. J. Carlton Collins, CPA, shows how to prepare data for, and mine data with, PivotTables.

QUIZ

Did you follow 2016’s biggest accounting news?

CPAs will remember 2016 as a year of new standards and new faces. How well did you follow the biggest accounting events? The 7 questions in this quiz will help you find out