1041 Attorney fees

[DonB]

Can prepaid attorney fees be deducted on a 1041? For work yet to be completed.

DonB

[mastertaxguy]

If paid in the tax year for the entity, yes.

[Uncle Sam]

1041 Attorney Fees

I suggest that you issue a 1099-MISC if the amount is over $ 600 in the year.

[Gretel]

I suggest that you issue a 1099-MISC if the amount is over $ 600 in the year.

Not quite, Attorneys need to get a 1099 for any amount.

[Uncle Sam]

Attorney Fees

Per the Instructions for 1099-MISC, P. 2

Payments to attorneys.
The term attorney includes a
law firm or other provider of legal services. Attorneys' fees
of $600 or more paid in the course of your trade or
business are reportable in box 7 of Form 1099-MISC

But I DO agree that legal fees in any amount, regardless of entity, should have a 1099-MISC reported.

[Burke]

Not quite, Attorneys need to get a 1099 for any amount.

You may be thinking of Gross Payments which are different than attorney's fees, and are reported in a different box.

[Gretel]

Actually, what I was thinking about that payments to attorneys need to be reported regardless of entity (no exception for corporations). In the back of my mind was that all payments to attorneys need to be reported. I am glad this got clarified.

[DonB]

I suggest that you issue a 1099-MISC if the amount is over $ 600 in the year.

I don't see an estate requirement to file 1099-MISCs in the instructions.

Trade or business reporting only.
Report on Form
1099-MISC only when payments are made in the course of
your trade or business. Personal payments are not
reportable. You are engaged in a trade or business if you
operate for gain or profit. However, nonprofit organizations
are considered to be engaged in a trade or business and are
subject to these reporting requirements. Other organizations
subject to these reporting requirements include trusts of
qualified pension or profit-sharing plans of employers, certain
organizations exempt from tax under section 501(c) or (d),
farmers' cooperatives that are exempt from tax under section
521, and widely held fixed investment trusts. Payments by
federal, state, or local government agencies are also
reportable.