On a 1041 trust return are tax preparation fees subject to 2% and therefore no longer deductible or are they deductible in full on line 14?

Lacerte has screen 32 Other Deductions where we entered investment advisory fees, and selected 2% of AGI limitation applied.  As of 2018 and TCJA these fees are no longer deductible. In the past I  have seen Tax Prep fees entered here as well subject to 2% but there is also screen 31 Taxes and Fees that will populate 1041 line 14, fully deductible. Also, screen 31 has two fields, Tax Preparation fees allocable to taxable income and another for allocable to taxable and tax-exempt income (even if I enter under tax prep in the second field, it does not allocate, it shows the entire amount on line 14).

Also, what about ADR fees, were they ever deductible albeit subject to 2% on a trust return? After TCJA they would not be, but should they still be entered like advisory fees for states like CA?

1 additional answer

No answers have been posted

More Actions

People come to Accountants Community for help and answers—we want to let them know that we're here to listen and share our knowledge. We do that with the style and format of our responses. Here are five guidelines:

  1. Keep it conversational. When answering questions, write like you speak. Imagine you're explaining something to a trusted friend, using simple, everyday language. Avoid jargon and technical terms when possible. When no other word will do, explain technical terms in plain English.
  2. Be clear and state the answer right up front. Ask yourself what specific information the person really needs and then provide it. Stick to the topic and avoid unnecessary details. Break information down into a numbered or bulleted list and highlight the most important details in bold.
  3. Be concise. Aim for no more than two short sentences in a paragraph, and try to keep paragraphs to two lines. A wall of text can look intimidating and many won't read it, so break it up. It's okay to link to other resources for more details, but avoid giving answers that contain little more than a link.
  4. Be a good listener. When people post very general questions, take a second to try to understand what they're really looking for. Then, provide a response that guides them to the best possible outcome.
  5. Be encouraging and positive. Look for ways to eliminate uncertainty by anticipating people's concerns. Make it apparent that we really like helping them achieve positive outcomes.

Select a file to attach: