Can I deduct the cost of changing our Trust as a Rental expense since the rental property is in the Trust?

[jazimmerman22]

The Rental property was purchased by the Trust. No deductions for Trust legal fees have ever been used. The Trust was modified in 2024 to name a different Executor, who will be responsible for dealing with the rental property when we pass away.

[MaryK4]

Yes, you can deduct the fees since they are "ordinary and necessary" for the continuing operation of the rental property.  

[jazimmerman22]

Thank you for your reply. As a follow-up, can I deduct the entire charge for updating our Trust, even though the Rental House is not the only property held in our Trust? Our primary home is also owned by the Trust.

Thanks again,

John

[DianeW777]

It depends. Based on your original question, then only the portion of the expense that applies to the rental property would be allowed as a deduction on the rental activity. If there is more than your personal home and the rental property in the trust, find the value of all properties then divide the value of the rental portion only by the combined total of all values.  This would give your the rental expense percentage of the cost to modify the trust.

@jazimmerman22