Form 1041 title insurance, office, and mailing expenses

[rhalexda]

I am Trustee of my mother's living trust. I believe that costs of title searches on conveyed properties, office supplies and other administrative expenses, and certified mail expenses for notices to beneficiaries are deductible on Form 1041.

If so, are they lumped together under "Attorney, Accounting and Tax Prep"? Or entered separately as Administrative Fees under "Other Deductions"?

When I open "Other Deductions" Turbo Tax gives me notice that the Tax Cuts and Jobs Act eliminated many of the "other deductions" and that other deductions are now uncommon. Nor are administrative fees on the list of examples of other deductions.

[Hi Palms · Accepted solution]

Any expenses that would be incurred by a hypothetical individual that are not deductible would also not be deductible merely because they are incurred by a trust. Those are known as miscellaneous itemized deductions subject to the 2% AGI floor and are not deductible due to the TCJA (2018-2025 tax years).

You can add title expenses (e.g., searches, fees) to the basis of properties. You can also deduct certain administrative expenses that the trust incurs by virtue of the fact that the trust incurs them, such as mail expenses for notices and office expenses directly related to maintaining the trust itself. 

[Mike9241]

If this is a grantor-type trust (GTT) there are special reporting requirements (see 1041 instruction starting on page 13). A GTT is a disregarded entity for income tax purposes. Income and deductions are reported on the grantor's 1040, not the 1041. The 1041 is merely an information return. Many deductions flowing to the grantor's 1040 would not be deductible because they would be itemized deductions that are no longer allowed under the TCJA

https://www.irs.gov/pub/irs-pdf/i1041.pdf 

[Hi Palms]

If this is a grantor-type trust

It is not a grantor trust. Read @rhalexda's other posts. The grantor had a living, revocable, trust and is now deceased so the trust became irrevocable and there are multiple beneficiaries.

[rhalexda]

Thank you.

Exactly where on form 1041 do I enter the administrative expenses, like office supplies and such? I did the accounting, myself. And these are costs which I had to spent from the trust to administer the trust. Do I just lump it in with attorney and accountant fees?

I need to 1099 myself for trustee fees paid. And I wouldn't want to add them there, because it would look like payments to me.

[Hi Palms · Accepted solution]

You should be able to put them on Line 15a but I don't know if Turbotax allows you to do that without running into the limitation. Otherwise, I would lump them in with Fiduciary fees or Attorneys fees.

[rhalexda]

Thank you.