Are legal fees for transferring property from estate to beneficiaries deductible?

[magiklamp]

A deceased parent owned rental properties. From the time of the decedent's death through tax year 2019, the estate has been filing fiduciary returns, passing the income and the tax liability through to the beneficiaries. The beneficiaries receive K-1s and use them to file their own Schedule Es. In 2020 I paid a lawyer to transfer those properties into the names of the beneficiaries. Does anyone get to deduct that expense?

[mellish7777]

Yes, the fees are deductible because they would not have been incurred if title wasn't held in the name of the estate. There's been action on this by the IRS so stay tuned for how this kind of thing gets deducted by the beneficiaries.

[magiklamp]

Thanks. Can you point me in the direction of where I can find more details on the IRS action you speak of? And do you know if/how such an expense was deductible in the past?

[mellish7777]

Here: https://www.journalofaccountancy.com/news/2020/may/trusts-estates-deductions-after-tcja.html