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Guidance For Estates and Trusts Regarding Itemizing Deductions

Posted by Admin Posted on May 14 2020

WASHINGTON — The Internal Revenue Service today issued proposed regulations that
provide guidance for estates and trusts clarifying that certain deductions of
estates and non-grantor trusts are not miscellaneous itemized deductions.

The Tax Cuts and Jobs Act (TCJA) prohibits individual taxpayers from claiming
miscellaneous itemized deductions for any taxable year beginning after December 31,
2017, and before January 1, 2026.

Specifically, the proposed regulations clarify the following deductions are
allowable in figuring adjusted gross income and are not miscellaneous itemized
deductions:

• Costs paid or incurred in connection with the administration of the estate or
trust which would not have been incurred otherwise.
• Deductions concerning the personal exemption of an estate or non-grantor trust.
• Deductions for trusts distributing current income.
• Deductions for trusts accumulating income

Finally, the guidance clarifies how to determine the character, amount and manner
for allocating excess deductions that beneficiaries succeeding to the property of a
terminated estate or non-grantor trust may claim on their individual income tax
returns.

For more information about this and other TCJA provisions, visit IRS.gov/taxreform.

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