April 2010

"Bundled" Fiduciary Fees Fully Deductible for 2009

From Journal of Accountancy.

The IRS in Notice 2010-32 extended to tax years beginning in 2009 its interim guidance on deductibility of a “bundled” investment advisory commission or fee paid to a trustee or executor on behalf of a nongrantor trust or estate.

The interim guidance was issued in February 2008 in Notice 2008-32 for tax years beginning before 2008 and extended to tax years beginning in 2008 by Notice 2008-116. It addresses the treatment of deductions claimed by a nongrantor trust or estate arising from payments of fiduciary commissions and fees that combine costs that are fully deductible and those that as miscellaneous itemized deductions are subject to the 2% of adjusted gross income floor under IRC § 67(a). Generally, the guidance provides that such “bundled” fees may be fully deducted while the IRS develops final regulations in light of proposed regulations and the U.S. Supreme Court’s decision in Knight v. Commissioner (552 U.S. 181 (2008)).

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