I have seen online and been told by both a CPA and our trust attorney that certain expenses for our rental properties can be paid by our irrevocable grantor trust (property taxes, insurance, improvements expenses). However, we have other expenses (mortgage taken out in our names, utilities, misc. services, etc.) that are not on that list.
This has not been an issue in the past, as the trust had no liquid assets, so we personally incurred all of the expenses. However, we are selling one of our two rental properties this year, so the trust would then have funds to pay for allowable expenses. That obviously would be a benefit to us as we would not be paying those from our own funds. But I do not understand how we would document/report expenses paid by the trust vs. those we pay. It would seem that we would have to port some info from the trust's Schedule E to ours, but I don't know if that's correct or possible, as I don't have the TT Business Edition.
