@heffner-sc wrote:
my conclusion is pretty much similar to yours ... this was after first, I was informed by the trustee that while his 'fee' was taxable, mine would not be. However, later after discussing with another CPA, apparently they said that portion of the trustee's fee (which is free to use anyway that trustee believes supportable) sent to me, was now taxable ... my position, as a beneficiary, that doesn't change tax categories under the scenario I've presented. thanks again -
I think that, if the trustee rebated part of the fee because they feel they didn't earn it, that just becomes part of the residue of the estate. If it's a large amount, you may want a professional opinion. If the trustee issues a tax document (like a 1099-NEC or 1099-MISC) there are ways to deal with it on your return so it won't be taxable, but the IRS may ask questions. But that may just be borrowing trouble that will never come.
