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    Attorney costs for estate

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

    #2
    Originally posted by kathyc2 View Post
    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.
    Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR

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      #3
      Estate attorney fees are deducted on the estate return. It has nothing to do with a 1040 Sch A.
      Believe nothing you have not personally researched and verified.

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        #4
        I just saw something from TTB regarding this exact issue. I have to dig it out.
        Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR

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          #5
          Originally posted by ATSMAN View Post
          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-...transactions-2
          Always cite your source for support to defend your opinion

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            #6
            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?
            Last edited by Burke; 07-20-2018, 11:07 AM.

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              #7
              Originally posted by Burke View Post
              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?

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                #8
                Where ??

                Originally posted by kathyc2 View Post
                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?
                There are no miscellaneous deductions on a 2018 Schedule A (or what's left of it!).

                FE

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                  #9
                  Originally posted by FEDUKE404 View Post
                  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.

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                    #10
                    Two groups of Schedule A miscellaneous stuff

                    Originally posted by TaxGuyBill View Post
                    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.
                    My bad!

                    I was basically referring to the miscellaneous deductions that are subject to the 2% limit. Say goodbye to tax prep, investment fees, employee business expenses, union/professional dues, safe deposit box, etc. (Would likely include a K-1 pass-through entry, topic of this thread??)
                    The stuff that was/is not subject to the 2% limit is a fairly short list, and at least for my clients something rarely encountered in the past.

                    (Why am I even fretting 2018 tax returns, when I still have several of the 2017 type to complete first??)

                    FE

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                      #11
                      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.
                      "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

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                        #12
                        Originally posted by kathyc2 View Post
                        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. http://www.mcguirewoods.com/Client-R...or-Trusts.aspx.
                        Last edited by Burke; 07-27-2018, 10:45 AM.

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