According to the IRS Instructions for Form 1041 - Schedule K-1 Box 11 Code A, excess deductions on termination are reported to the beneficiaries as an adjustment to income on Form 1040 Schedule 1. Since these instructions apply to both trusts and estates, it would logically follow that the deductions would retain their character through the estate to the trust and ultimately to beneficiaries.
Most of the available authoritative information focuses on how the Sec 67(e) deductions are treated (not miscellaneous deductions) and how they should be reported to the individuals who claim the deductions on Form 1040.
You may wish to consult with a local tax attorney with estate and trust experience for advice specific to your tax situation.
Additional information:
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