DEDUCT LEGAL FEES FOR ESTABLISHING A TRUST WITH INCOME

ddranalli · ‎February 23, 2026

Legal fees were paid to establish a grantor trust. Checking, Savings and CD accounts in trust generated 1099-INT interest income. Can fees be deducted to help offset tax on that income?

JohnB5677 · ‎February 23, 2026

No, legal fees to setup a Grantor Trust aren't deductible.

These fees are considered personal expenses and are not deductible even if reported on a grantor letter.
Fees paid to an attorney to create the trust are considered capital expenses, not expenses for producing income, and are not deductible.

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View solution in original post

JohnB5677 · ‎February 23, 2026

No, legal fees to setup a Grantor Trust aren't deductible.

These fees are considered personal expenses and are not deductible even if reported on a grantor letter.
Fees paid to an attorney to create the trust are considered capital expenses, not expenses for producing income, and are not deductible.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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DEDUCT LEGAL FEES FOR ESTABLISHING A TRUST WITH INCOME