Final 1041

[TAX4US]

Tax book page 4-26 indicates that excess deductions on termination Not Deductible. 2018 Beneficiary instructions page 2 indicates they are deductible. Can someone clear this up for me as I have 2 1041's final year with excess deductions. Manny thanks

[Branka]

Don Farmer discussed this in his recent webinar. This is from my webinar notes. Because TCJA disallows 2% deductions, excess deductions on termination appear to be nondeductible; however, the item is still on the 1041 K-1's. The AICPA asked for the deduction to NOT be subject to the 2% limitation, with no response; the deduction appears to be allowed on Line 16 of Sch. A. I note that the deduction is not listed on the draft of the Schedule A instructions for line 16 and wonder if you would want to await the final Schedule A instructions.

[John of PA]

The article on this in the current issue of AICPA THE TAX ADVISOR supports it being deductible.