Final IRS Sect. 67(e) Regs for Estate and Trust Taxpayers: Applying the Required 2% Deduction Floor
Navigating Fully Deductible vs. Fees Subject to the Floor, Rules for Conditionally Deductible Fees, Unbundling Fee Methodologies
Recording of a 110-minute CPE/CLE webinar with Q&A
This webinar will prepare tax advisors and counsel to understand when a trust or estate’s fees are deductible or subject to the 2% floor for itemized deductions. New regulations under Sect. 67(e) provide rules, which are not intuitive, governing whether various expenses paid by estates and trusts are fully deductible, or subject to the 2% floor. The panel will provide guidance to unraveling the confusion over unbundling fees, and the treatment of investment advisory fees.
Outline
- Background: Court cases and regulations prior to finalized Sect. 67(e)
- Lack of clarity in original Sect. 67(e)
- 2% floor for below the line deductions
- Confusion over investment advisory fees
- Split between Sixth Circuit and Fourth/Federal Circuit rulings
- Knight v. Commissioner U.S. Supreme Court Decision
- Temporary guidance leading up to final regs
- Lack of clarity in original Sect. 67(e)
- Details of final regulations
- Interpreting the “commonly or customarily incurred” clause
- Specific categories of fees
- Appraisal fees
- Investment advisory fees
- Tax preparation fees
- Ownership costs
- Bundled fees
- Unbundling fees for mixed services
- Absence of recommended methodology
- Practical examples and recommended strategies
- Estate and trust planning considerations
- Impact on filing returns
- Alternative Minimum Tax (AMT) issues
Benefits
The panel will explore solutions to problems stemming from the Sect. 67(e) regs, including:
- Determining which fees are subject to the 2% itemized deduction floor, and which fees are fully deductible.
- Applying the new rules to investment advisory fees and other fees whose susceptibility to the 2% floor is conditional.
- Exploring methodologies for unbundling bundled fees that aren’t clarified by the regulations.
- Anticipating potential Alternative Minimum Tax implications of the 2% floor.
- Applying the new rules to not only trusts and estates, but family office structuring and management considerations.
Faculty
Tina D. Milligan
Managing Director
HarrismyCFO
Ms. Milligan is a Managing Director at CTC | myCFO, an integrated wealth management provider serving ultra-affluent... | Read More
Ms. Milligan is a Managing Director at CTC | myCFO, an integrated wealth management provider serving ultra-affluent individuals, families and family offices with their tax, estate, investment, philanthropic, risk and family capital needs. Her expertise includes tax planning and compliance, wealth transfer, charitable and philanthropic planning, and business owner and corporate executive planning. Ms. Milligan frequently speaks on estate, tax and financial planning issues.
CloseDomingo P. Such, III
Partner
Perkins Coie
Mr. Such focuses his practice on financial, estate and tax planning matters as they relate to ownership in various... | Read More
Mr. Such focuses his practice on financial, estate and tax planning matters as they relate to ownership in various forms. He represents wealthy families and individuals concerning significant and complex estates and trusts, advising on gift, estate and generation-skipping transfer tax planning, charitable giving, and planning for succession of ownership during life and at death. His twenty years of work experience includes transfer tax, income tax, business planning, executive compensation planning for private and public companies, charitable organizations and probate administration, and corporate transactions.
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