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Excess Deductions on Termination Deduction is Back

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    #1

    Excess Deductions on Termination Deduction is Back

    IRS has a proposed reg 113295-18 stating that Excess Deductions on Termination of a Trust can be deducted on Schedule 1 starting in 2018. Has anyone else seen this?
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    #2
    Yes, One of many articles addressing it.

    Trusts and estates are permitted certain deductions
    https://www.journalofaccountancy.com/news/2020/may/trusts-estates-deductions-after-tcja.html
    The IRS issued proposed regulations to clarify that certain deductions are allowed to an estate or nongrantor trust because they are not miscellaneous itemized deductions.
    Always cite your source for support to defend your opinion

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      #3
      After reading it since this will become a deduction before AGI will the states conform? If we prepared K-1 and had excess deductions do we need to inform heirs as to where to report or correct their original filing?

      Will it require form 1040X? Just a question I had.

      Comment

        #4
        Of course 1040X will be needed for any 2018 or 2019 return already filed without this deduction claimed.

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