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Final Regulations for Estates and Non-grantor Trusts


October 1, 2020 - Final regulations for estates and non-grantor trusts were released on September 21, 2020 by the Internal Revenue Service (IRS) providing guidance on deductions. The guidance clarified that certain deductions are not to be considered miscellaneous itemized deductions.

The Tax Cuts and Jobs Acts of 2017 prohibits individuals, estates and non-grantor trusts from claiming miscellaneous itemized deductions for any taxable year starting after December 31, 2017, and before January 1, 2026.

Per the final regulations released, the IRS clarifies that the following deductions, although allowable, are not considered miscellaneous itemized deductions in calculating adjusted gross income:

  • Deductions for costs paid or incurred in connection with the administration of the estate or trust that would not have been incurred if the property were not held in such estate or non-grantor trust.
  • The deduction pertaining to the personal exemption of an estate or non-grantor trust.
  • The distribution deductions for trusts distributing current income.
  • The distribution deductions for trusts accumulating income.

The final regulations also provide additional guidance on deductions, such as the amount and manner of allocating, that can be found here. For more information regarding the recently released final regulations, please contact your Dermody, Burke & Brown, CPAs professional advisor.


The information reflected in this article was current at the time of publication.  This article will not be modified or updated for any subsequent tax law changes, if any.

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