Application of two-percent floor on itemized deductions to trusts and estates

In Mellon Bank (2000), the Court of Federal Claims found that expenses paid to an independent investment adviser were subject to the 2% floor on miscellaneous itemized deductions in Section 67(a). Mellon Bank has since been appealed to the Federal Circuit. A victory for Mellon Bank on appeal may sig...

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Bibliographic Details
Published in:The Tax Adviser 2001-06, Vol.32 (6), p.375
Main Author: Madden, David
Format: Magazinearticle
Language:English
Subjects:
Estate tax
Estates
Federal court decisions
Fees & charges
Fiduciaries
Internal Revenue Code
Laws, regulations and rules
Section 67
State court decisions
State laws
Tax courts
Tax deductions
Taxation
Trusts
Trusts and trustees
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Summary:In Mellon Bank (2000), the Court of Federal Claims found that expenses paid to an independent investment adviser were subject to the 2% floor on miscellaneous itemized deductions in Section 67(a). Mellon Bank has since been appealed to the Federal Circuit. A victory for Mellon Bank on appeal may signal at least a temporary end to the uncertainty surround the scope of Section 67(e). However, if the Federal Circuit affirms, fiduciaries and tax practitioners will face a split in the circuits and conflicting guidance as to the proper treatment of many common trust expenses.
ISSN:0039-9957