Open TurboTax

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
Your taxes, your way. Get expert help or do it yourself. >> Get started
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

cancel
Showing results for 
Search instead for 
Did you mean: 
Randman
Level 1

Form 1041 Fiduciary Fees Deduction?

I'm filling out a 1041 Form. My attorney itemized several fees in addition to his fees that he paid. Such as Court costs, Personal Representative's Bond, etc. Can I include these in the "Professional, accounting, and tax prep fees" section under Deductions?

 

And, I'm also not seeing much guidance on what to do with "Taxable income only" versus "Tax-exempt income only". Or how I would know.

 

The IRS publication 559 is pretty useless on helping with these two items.

 

Thanks in advance,

 

Randy

1 Best answer

Accepted Solutions
tagteam
Level 15

Form 1041 Fiduciary Fees Deduction?


@Randman wrote:

Such as Court costs, Personal Representative's Bond, etc. Can I include these in the "Professional, accounting, and tax prep fees" section under Deductions?


Yes, those expenses would be deductible by the estate since they would not have been incurred by a hypothetical individual.

 

 

 


@Randman wrote:

And, I'm also not seeing much guidance on what to do with "Taxable income only" versus "Tax-exempt income only". 


You simply need to allocate the expenses between taxable income and tax-exempt income. For example, if you had $50 in expenses, $100 in taxable income, and $100 in tax-exempt income, you would allocate $25 of the expenses to taxable income and $25 in expenses to tax-exempt income.

View solution in original post

2 Replies
tagteam
Level 15

Form 1041 Fiduciary Fees Deduction?


@Randman wrote:

Such as Court costs, Personal Representative's Bond, etc. Can I include these in the "Professional, accounting, and tax prep fees" section under Deductions?


Yes, those expenses would be deductible by the estate since they would not have been incurred by a hypothetical individual.

 

 

 


@Randman wrote:

And, I'm also not seeing much guidance on what to do with "Taxable income only" versus "Tax-exempt income only". 


You simply need to allocate the expenses between taxable income and tax-exempt income. For example, if you had $50 in expenses, $100 in taxable income, and $100 in tax-exempt income, you would allocate $25 of the expenses to taxable income and $25 in expenses to tax-exempt income.

Matilda
Level 3

Form 1041 Fiduciary Fees Deduction?

So for all fees (fiduciary, legal, accounting) you select "both" for taxable and/or tax exempt .  This places the amount in the third column of the deduction allocation worksheet for 1041.  It does not appear to affect the amount used for deduction.

About Community

Learn about taxes, budgeting, saving, borrowing, reducing debt, investing, and planning for retirement.

3.48m
Members

2.6m
Discussions

Manage cookies
v