Personal Representative paid probate attorney fees from personal account - can estate deduct on 1041?

The attorney fees your mom paid as Personal Representative can absolutely be deducted on the estate's final Form 1041, even though she paid them from her personal account. These are considered expenses of administration that benefited the estate, so they're properly deductible on the estate tax return. The key here is documentation. Make sure your mom keeps receipts showing she paid these expenses in her capacity as Personal Representative. It's not necessary for her to have been "reimbursed" by the estate - the IRS recognizes that PRs sometimes pay expenses personally. When completing the 1041, these expenses would typically be deducted on Line 14 (Fiduciary fees) or Line 15 (Other deductions). This will indeed flow through to the K-1 and ultimately benefit your mom on her personal return.

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I need to follow up on my skeptical comment above. I decided to try taxr.ai for my mom's estate tax questions since I was struggling with some complicated deductions for property management during probate. The analysis I received was surprisingly thorough and specifically addressed my situation with proper tax citations. They confirmed that as executor, I could deduct expenses I paid personally on the estate's 1041, and explained exactly how to document everything properly. It wasn't generic advice at all - they addressed the specific timing issues I was concerned about and even pointed out a commonly missed deduction for certain admin expenses. Definitely more helpful than the generic advice I was finding online.

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I need to eat crow here. After posting my skeptical comment, I was still struggling to reach someone at the IRS about my father's estate tax situation. Out of desperation, I tried Claimyr, fully expecting it to be a waste of money. I was shocked when I actually got connected to an IRS agent in about 25 minutes. The agent confirmed that as executor, my payment of attorney fees from my personal account is absolutely deductible on the estate's 1041. They walked me through the exact form lines and documentation needed. This saved me literally weeks of stress and uncertainty. Sometimes it's worth admitting when you're wrong, and I was definitely wrong about this service.

Something else to consider - if the attorney fees were related to tax advice or preparation of the estate tax return, they might qualify for deduction on Schedule A of your mom's personal return as a miscellaneous itemized deduction subject to the 2% AGI floor. This would only be relevant if for some reason you couldn't deduct them on the 1041. But from what you've described, they should definitely go on the 1041 as administrative expenses.

Don't forget that this needs to be the FINAL 1041 with the "Final Return" box checked. Many executors miss this and end up getting notices from the IRS asking for returns for subsequent years. Also make sure Form 56 (Notice Concerning Fiduciary Relationship) is filed showing the termination of the fiduciary relationship.

Just to add another perspective - make sure you have clear documentation showing your mom was acting in her capacity as Personal Representative when she paid these fees. A simple letter or memo to the file stating something like "Paid attorney fees of $7,600 on behalf of [Estate Name] from personal funds due to bank restrictions" can be helpful documentation. Also, when you enter these on the 1041, you might want to attach a brief statement explaining the circumstances (that the estate's bank wouldn't allow the payment but the PR paid personally). This isn't required, but it can prevent questions later if the IRS reviews the return. The good news is that since your mom was the sole beneficiary, this is really just a timing difference - the money was always going to come out of "her" funds eventually anyway, whether directly from the estate account or indirectly through her inheritance.