Can You Deduct Fees for Setting Up a Revocable Trust From Your Taxes?

By: Alan Sembera

The fees you pay to set up a revocable trust are generally considered personal expenses, which are not deductible for tax purposes. However, if you received advice about taxes or tax planning in relation to the trust, or if the trust includes provisions for the production or collection of income from property included in the trust, you may be able to deduct part of the fees. The Internal Revenue Service considers these valid deductions, and they can be claimed as miscellaneous itemized deductions.

Reporting the Expenses

Before claiming the deduction on your tax return, ask your attorney or financial planner for an itemized statement of your fees. The statement should break the fees down into portions that relate to personal matters, tax matters and income-producing aspects. While tax advice is usually easy to define, what qualifies as an income-producing expense isn't always clear, so you may want to consult a qualified tax professional if you plan to claim this deduction. You can report the deductible amounts as miscellaneous expenses on Schedule A. However, you can only deduct the portion of miscellaneous expenses that exceed 2 percent of your adjusted gross income.


About the Author

Alan Sembera began writing for local newspapers in Texas and Louisiana. His professional career includes stints as a computer tech, information editor and income tax preparer. Sembera now writes full time about business and technology. He holds a Bachelor of Arts in journalism from Texas A&M University.

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