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Level 6
April 5, 2021
Question

Tax prep fees paid by beneificary in final year of trust return

Sole beneficiary paid the tax prep fees from prior year(s)  for the trust.   Would like to include the tax prep expense on the 1041, line 14,  but am thinking since it didn't come from trust account, the trust cannot take the deduction.  It is the final year for the trust and all funds went to beneficiary.

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4 replies

sjrcpa
Level 15
April 5, 2021

I'd probably allow it. It's the same as if the trust paid it and then distributed the rest of the funds.

This is not the technically correct answer.

The more I know the more I don’t know.
Level 6
April 5, 2021

RE: technical... That's what I thought, too.

BobKamman
Level 15
April 5, 2021

Cash basis accounting?  Beneficiary  paid it in 2020?

Level 6
April 5, 2021

yes