Some estate planning expenses may be tax deductible if they are related to the management of income-producing property. Please contact your CPA and ask him about Internal Revenue Code (I.R.C.) § 212(2). But these expenses are subject to the 2% floor on miscellaneous itemized deductions under I.R.C. § 67.

Once the estate plan is already in place, trustee’s fees and other trust administration expenses are deductible for income tax purposes to the extent that they are for the production of taxable income. Ask your CPA about Internal Revenue Ruling 58-53, 1958-1 and Trust of Bingham v Commissioner , 325 US 365 (1945). The deduction for trust administration expenses of a grantor trust are passed through to the settlors during the settlors’ lifetimes and are also subject to the 2% floor on miscellaneous itemized deductions under I.R.C. § 67(c).

So the bad news is, fees for pre-death services relating to non-income-producing assets do not qualify for an income tax deduction.

Disclaimer: The Law Office of Mark Abell represents clients throughout Southern California. The information contained on this website is not to be construed as legal advice. It is not intended to solicit or form an attorney-client relationship. I do not guarantee any result, and prior results do not guarantee a similar outcome. This is an attorney advertisement and this website is for informational purposes only.

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