Are legal fees for the preparation of my personal trust deductible?

[MargaretL · Accepted solution]

Yes, they are deductible if the billing invoice identifies your expenses as being for the production/collection/managing future production of income or tax. You can deduct legal fees if they are incurred for:

• the production or collection of income, or
• the management of the property held for production of income, or
• tax advice and tax planning

For example, you paid fees for advice on the income trust or for advice on the property transfer to avoid federal/state or inheritance tax, or investment advice for trust -those fees would be tax deductible. 

If your total legal fees include both, deductible and nondeductible items,  you must somehow allocate the amount between allowed and disallowed fees.

Legal fees are deducted in the Deductions & Credits section:

1. Federal Taxes
2. Deductions and Credits
3. Scroll down to Other Deductions and Credits
4. Select Legal Fees