Can trusts deduct adviser fees?
TAX CASES Many trust fiduciaries incur investment adviser fees while administering the trust. To reduce taxable income, the trustee wants to deduct these costs against trust income–but the courts are split on the issue. The Tax Court recently was asked to reconsider the question. Henry Rudkin established a testamentary trust with the proceeds of the sale of his business, Pepperidge Farm, to Campbell Soup Co. The trustee hired Warfield Associates Inc. to provide investment advice, and then deducted payments to Warfield of $22,241 on the trust’s 2000 income tax return.
