Answer: Prior to the Tax Reform act of 2018, the IRS allowed deduction of your estate planning legal fees and costs, related to your “income”. For example, legal fees related to the creation of a Trust holding title to “income producing property”, once qualified as deductible. However, with the passage of the new act, the deduction has been negated until 2025.
California financial advisor, Jason Thomas, explains why this is not a huge loss: “Even when estate planning fees were deductible, it was only for expenses related to the production of income, not for all estate planning fees”. Furthermore, Thomas states, “expenses were previously subject to a floor of 2% of your Adjusted Gross Income”, meaning you would need very high expenses, to begin deducting.
As always, confer with a CPA to obtain the latest advice on such tax matters.
Attorney James Haroutunian practices real estate, estate planning and business law in Billerica at 630 Boston Rd and can be reached with questions at 978-671-0711 or via email: James@hlawoffice.com.