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
You'll need to sign in or create an account to connect with an expert.
@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.
@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.
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.
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
elahoo
Level 1
shawnmerrick8614
New Member
samlong75
New Member
koalamiche
New Member
andrewking8701
New Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.