Trustee Fees

[RST]

Where do you deduct trustee fees related to liquidation of a business

[Nashville]

What Kind of Business?

Need more info regarding circumstances. For example, is this a corporation? a proprietorship? bankruptcy proceedings?

[RST]

Trustee Fees

This was a corporation that offered cell phone service. It is now a shareholder liquidating trust

[Nashville]

Legit Expense

I think you have a legitimate expense, but going to be hard to deduct until commingled with other expenses.

The trust obviously has a corpus, assumed to be positive or no one would have gone to the trouble to set it up. Under liquidation, it's hard to imagine the entity would have positive income, so all expenses would reduce the corpus.

I would accumulate all expenses until such time as a distribution is made. The corpus would be reduced every year by i)expenses and ii)distributions.

When distribution is made on a K-1, you can actually distribute a loss if it has occurred.
The loss would be a measure of the corpus reduction attributable to expenses, and this would include (presumably among other things) a trustee's fee.

Also a trustee's fee may be a perfectly legit deductible expense for the trust, but it also might be subject to the same 2% feature as occurs on Sch A for individuals. If it is under liquidation, it might not be relevant as there may be no income whereby to apply the 2%.