Complex Trust return preparation

Forum|Forum|6 years ago
May 24, 2020
1 reply
20 views

Under IRC Section 67 (e) & (g), money manager fees are not deductible by a complex trust. The money manager fees are deductible in computing "Accounting Income" for the trust. As far as I can tell, Lacerte will not allow non-deductible treatment for taxable income and deductible for "Accounting Income" or otherwise treat the expense differently for the two separate income calculations.

Is there a fix that I am missing?

Muchacho

Lacerte Tax

This topic has been closed for replies.

BobKamman

Level 15

Trusts can deduct "Costs paid or incurred in connection with the administration of an estate or nongrantor trust that would not have been incurred if the property were not held in the estate or trust."

Why have you determined that the trustee is capable of managing money without the help of a financial advisor?

Accountant-Man

Level 13

If the property, let's assume stocks, bonds and mutual funds, were held by a person, would the money management fees be deductible?

Schedule A, miscellaneous, not deductible on federal return.

** I'm still a champion... of the world! Even without The Lounge.

BobKamman

Level 15

99% of the people I know don't need a "money manager," whatever that is. I assume it's more in the nature of "investment advisory fees." If an individual chooses to pay those, they are for now not deductible because he does not have a fiduciary obligation to himself. If a trustee does not have the skills to make investment decisions, then the fees paid to avoid breach of fiduciary duty should fall in the same category as the trustee fees themselves. If the Great Bank of Everywhere manages trusts using the advice of its in-house analysts, I doubt it removes those salaries from the deductions on Forms 1041 it prepares.

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