Knight v. Commissioner Analyzed

In his February 2008 issue of Estate Analyst, Robert L. Moshman, Esq. discusses the recent U.S. Supreme Court case of Knight v. Commissioner. The following excerpts are from his article entitled A Knight’s Tale, Est. Analyst (Feb. 2008):

The United States Supreme Court has ruled that the investment advice received by a trust is subject to the 2% threshold to be deductible.***

Trustee Knight argued that while an individual may make a voluntary and personal choice to seek investment advice, fiduciary duties render such professional advice a necessary and “involuntary” component of trust administration.***

A small window of hope was left open, however. The Court noted that a trust could have some unique investment objective or some investment advisors might have some special surcharge that is applicable only to fiduciary accounts.