New Guidance on the Impact of the 2017 Tax Act on Excess Deductions on Form 1041

After the 2017 Tax Act, there was confusion about the availability of "excess deductions" on Form 1041.  In the past, trustees and personal representatives could pass unused deductions on the final return (Form 1041) for the trust estate to the trust and estate beneficiaries.  This would be useful when the expenses (fiduciary, legal and accounting fees) exceeded the income for the tax year. The beneficiaries, if they itemized deductions on their personal returns could use their share of the excess deductions on their personal returns.  That seems fair, right?  In the linked commentator, respected national expert, Ron Aucutt, commented on the latest from the IRS.  It looks like recent guidance from the IRS has solved the problem. This still requires careful coordination by the trustee or personal representative of an estate, the attorney, and the accountant preparing Form 1041 for the estate and/or trust.  Here's the link to Ron's article.

Ron Aucutt - A Decade of Disrupted Tax Guidance