IRS Clarifies What Is Subject to the 2% Floor for 67(a) Itemized Deductions

The IRS modified and superseded IRS Notice 2010-32 when the Supreme Court decided Knight v. Comm’n. That case held that “fees paid to an investment advisor by a non-grantor trust or estate generally are subject to the 2-percent floor for miscellaneous itemized deductions under section 67(a).” The new guidance also specifies which estate or non-grantor trust costs are  subject to the 2% floor for miscellaneous itemized deductions under 67(a).

See William Alan Nelson II, Extension of Interim Guidance on Section 67 Limitations on Estates or Trusts, Wealth Strategies Journal, Sept. 8, 2011; See also IRS Notice 2011-37.

Special thanks to Jim Hillhouse (Professional Legal Marketing  (PLM, Inc.)) for bringing this article to my attention.