Can I deduct successor trustee expenses against my trustee fee on a 1040 this year?
I'm trying to figure out the tax situation for my parent's estate that I'm settling as successor trustee. My CPA mentioned I can possibly deduct the expenses I've racked up while handling the estate against the trustee fee I'm receiving on my personal tax return (Form 1040). He started explaining something about Schedule A and miscellaneous deductions but had to take a call in the middle of our meeting and I didn't get all the details. I've spent about $3,200 in travel, some office supplies, and had to take unpaid time off work to handle estate matters. The trust is paying me a $14,500 trustee fee for my services. Would these expenses be deductible against the fee income on my personal return? I'm reporting the trustee fee as income, but I'm not sure if these expenses are properly deductible or where they would go on my return. Any guidance would be appreciated since I'm trying to get everything organized for the 2025 filing season.
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Malik Jenkins
This is a great question about trustee expenses and fees! The trustee fee you're receiving ($14,500) is indeed taxable income that should be reported on your personal 1040. It will typically be reported on Schedule C as self-employment income. The good news is that legitimate expenses you incur as a trustee can be deducted against this income on that same Schedule C. This includes things like travel expenses related to trust administration, office supplies, postage, and other direct costs associated with your trustee duties. These are considered "ordinary and necessary" business expenses for your role as trustee. However, be careful about the unpaid time off work - that's generally not deductible as you can't deduct the value of your time or services.
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Freya Andersen
•Thanks for the explanation. I'm in a similar situation but was told my trustee fee should be reported as "other income" on line 8 of Form 1040, not Schedule C. Which is correct? And can I still deduct my expenses if it's not on Schedule C?
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Malik Jenkins
•The reporting depends on specific circumstances. Trustee fees can sometimes be reported as "other income" on line 8 of Form 1040, avoiding self-employment tax, if your activities are more passive in nature and don't constitute a trade or business. Yes, you can still deduct expenses even when reporting as "other income," but you'd use Schedule A as miscellaneous itemized deductions subject to the 2% AGI floor. However, this route is less favorable than Schedule C deductions since Schedule C deductions reduce your income dollar-for-dollar. Your particular situation determines the proper reporting method, and the nature and extent of your trustee activities will guide this decision.
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Eduardo Silva
I went through a nightmare situation trying to figure out exactly this with my dad's estate last year. After tons of research and conflicting advice, I finally used https://taxr.ai to analyze all my trust documents. The system quickly showed me which expenses qualified as deductions against my trustee income. They analyzed the trust document itself and confirmed I should file using Schedule C instead of "other income" based on my specific trustee duties and the trust terms. It saved me from potentially significant tax issues since I was about to file incorrectly.
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Leila Haddad
•How exactly does this taxr.ai thing work? I'm handling my uncle's estate and getting conflicting advice from two different tax preparers about the deductions. Does it give actual tax advice or just analyze documents?
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Emma Johnson
•I'm skeptical about AI tax tools. Does it actually understand the nuances of trustee fees and expenses? And did you still need your CPA after using it or were you able to handle everything yourself?
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Eduardo Silva
•The way it works is you upload your trust documents, expense receipts, or any other tax documents, and the AI analyzes them and explains what everything means in plain English. It specifically pointed out language in my trust document that classified my trustee work as "services rendered" which supported using Schedule C. I still used my CPA, but I was able to confidently discuss the proper treatment of my trustee income and expenses with him. It acted like a second opinion and helped me understand the "why" behind the tax treatment. The system is actually very good with complex situations like trusts and estates because it can process all the legal language and connect it to the relevant tax laws.
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Emma Johnson
I want to update regarding my skeptical comment about taxr.ai. I decided to try it with my mother's trust documents where I'm the successor trustee. Honestly, it was surprisingly helpful. The system correctly identified that my situation was different - my trusteeship is more passive oversight rather than active management. Based on the analysis of my specific trust language, it showed me that reporting as "other income" was actually correct in my case, but outlined exactly which expenses were still deductible on Schedule A. Saved me a potential headache since I was planning to use Schedule C based on advice I'd read online that didn't apply to my specific situation.
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Ravi Patel
If you're getting stuck with the IRS on this trustee expense issue, try https://claimyr.com - saved my sanity last year when I needed clarification on some complex trust tax questions. I spent weeks calling the IRS directly with no luck, but Claimyr got me through to a real agent in under 45 minutes who confirmed exactly how to handle my trustee expenses. They have a demo video at https://youtu.be/_kiP6q8DX5c showing how it works. The IRS agent I spoke with walked me through the specific line items where trustee income and expenses should be reported based on my particular situation.
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Astrid Bergström
•Wait, how does this actually work? Do they call the IRS for you? I've been trying to reach someone about a similar trust issue for weeks.
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PixelPrincess
•Yeah right. Nothing gets you through to the IRS faster. I've been calling for months about an estate tax question. Sounds like a scam to me.
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Ravi Patel
•They don't call for you - they secure your place in the IRS phone queue and call you back when they're about to connect you. Then you speak directly with the IRS agent yourself. It saves you from having to wait on hold for hours. The system monitors IRS phone queues and jumps in when wait times are shortest. It's basically like having someone wait on hold for you. When I used it, I received a call back about 40 minutes later and was immediately connected to an IRS agent. I explained my trustee fee situation and got the exact guidance I needed straight from the source.
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PixelPrincess
I need to admit I was wrong about Claimyr. After posting my skeptical comment, I was desperate enough to try it for my estate tax question. It actually worked! Got a call back in about an hour and spoke directly with an IRS agent who specialized in estates and trusts. The agent confirmed that as a successor trustee, my expenses should be deducted on the same form where I report the income. In my case, because I was actively managing multiple properties in the trust, it was definitely Schedule C. She also mentioned keeping excellent records of all trustee-related expenses since this is an area that can trigger questions.
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Omar Farouk
One important thing nobody has mentioned: make sure you're keeping detailed records of ALL your trustee expenses. The IRS loves to challenge these deductions. I learned the hard way last year when my deductions were questioned. Create a separate credit card or checking account just for trustee expenses. Get receipts for everything. Keep a mileage log if you're traveling to trust properties. Document why each expense was necessary for your trustee duties. Trust me, if you get audited, you'll be grateful for the documentation.
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Chloe Martin
•Does anyone know if probate court fees can be included in deductible trustee expenses? The estate I'm handling had to go through partial probate and I personally paid about $1,850 in court costs.
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Omar Farouk
•Court fees related to administering the trust assets can typically be deducted as trustee expenses if you paid them yourself as part of your trustee duties. These would be considered necessary expenses in fulfilling your fiduciary responsibility. Make sure you have documentation showing you personally paid these costs rather than having them paid directly from trust assets. If they were paid from trust assets, they would be deducted on the trust's tax return (Form 1041) rather than your personal return.
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Diego Fernández
Has anyone used TurboTax to report trustee fees and expenses? Does it walk you through where to put this stuff or do I need to use a CPA? I'm getting a modest fee ($8,000) for handling my mom's trust but spent about $2,100 on expenses.
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Anastasia Kuznetsov
•I used TurboTax last year for my trustee income. It actually handled it pretty well. When you get to the income section, it asks about different types of income and there's an option for self-employment or business income. That's where I entered my trustee fees. Then it walks you through business expenses where you can deduct your trustee-related costs. Just make sure to answer the questions accurately about how active your trustee role is. That determines whether it guides you to Schedule C or "other income.
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