Deductibility of legal fees relating to custody issues on a trust tax return

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Message Board Deductibility of legal fees relating to custody issues on a trust tax return

This topic contains 4 replies, has 2 voices, and was last updated by Teresa Crivello 6 days, 2 hours ago.

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  • #141253
    Teresa Crivello
    Participant

    My clients’ daughter passed away and they now have legal custody of their granddaughter. The mother (decedent) left her daughter an IRA which is to be held in a trust until the daughter reaches a specific age. There will be IRA distributions for the next five years and, therefore, there is taxable income and tax at the trust level.

    The grandparents incurred legal fees relating to obtaining custody of their granddaughter. Are the legal fees a deductible expense on the trust tax return?

    Thank you,

    Teresa

  • #141528
    Sandy Weiner
    Participant

    I don’t the custody-related legal fees can be deducted on the trust return.

  • #142054
    Teresa Crivello
    Participant

    Can you please clarify your response? I am unclear if you said the legal fees are not deductible. Please confirm.

    Thank you,

  • #142239
    Sandy Weiner
    Participant

    Sorry about that Tereas. I don’t believe the custody-related legal fees can be deducted on the trust return.

  • #142243
    Teresa Crivello
    Participant

    Thank you very much for your reply!

    Thank you,

    Teresa