Attorney costs for estate

[kathyc2]

Since they eliminated the 2% items on Sch A, is there no place to deduct attorney fees for settling of an estate?

[ATSMAN]

Since they eliminated the 2% items on Sch A, is there no place to deduct attorney fees for settling of an estate?

You are correct! I suppose if the Technical Corrections does not clarify this issue it is gone.

[taxea]

Estate attorney fees are deducted on the estate return. It has nothing to do with a 1040 Sch A.

[ATSMAN]

I just saw something from TTB regarding this exact issue. I have to dig it out.

[TAXNJ]

I just saw something from TTB regarding this exact issue. I have to dig it out.

Maybe on TTB 21-32. See chart ref. Schedule J on form 706
But, also note: Attorney fees. Fees incidental to litigation incurred by the beneficiaries are not deductible.

Also:

https://www.irs.gov/faqs/other/misc-estate-abusive-tax-avoidance-transactions/misc-estate-abusive-tax-avoidance-transactions-2

[Burke]

Taxea is correct. Attorney's fees for settling an estate are deducted along with accountant's fees and tax preparer fees on the Form 1041 as an administrative expense. They are not subject to the 2% exclusion. Note the IRS just released Notice 2018-61 "clarifying" the 2% deduction for estates and trusts. If you can parse the legalese...... I read it once and think I got it. Need to study it again. It is not clear but OP may have been referring to the pass-through on the K-1 of any administrative expenses on the final 1041 to the beneficiaries' Form 1040?

[kathyc2]

It is not clear but OP may have been referring to the pass-through on the K-1 of any administrative expenses on the final 1041 to the beneficiaries' Form 1040?

Yes, that is what I was referring to. I just skimmed though the recent IRS e-mail regarding misc Sch A deductions. Is it your opinion that it may still be allowed?

[TaxGuyBill]

There are no miscellaneous deductions on a 2018 Schedule A (or what's left of it!).

FE

Yes there are. For 2017, there are TWO types of miscellaneous deduction on Schedule A: (1) Those subject to the 2% limit and (2) those that are not subject to the 2% limit.

in 2018, only the ones that are subject to the 2% limits are gone. Those not subject to the 2% limit still exist.

[JohnH]

Off topic, but just had to say this. I thought the expression "my bad" was fairly recent in origin. Imagine my surprise while recently watching a re-run of the Ed Sullivan show when someone said that to Ed while apologizing for mixing up a celebration date.

[Burke]

Yes, that is what I was referring to. I just skimmed though the recent IRS e-mail regarding misc Sch A deductions. Is it your opinion that it may still be allowed?

I read it as applying only to the deduction on the estate income tax Form 1041 and/or estate Form 706 returns. Note that an explanation from McGuire Woods relating to Notice 2018-61 states IRS is still studying this issue and will publish additional clarification particularly on the deductibility on Sche A for the final year of an estate. See final paragraph of this link. https://www.mcguirewoods.com/Client-...or-Trusts.aspx.