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Lane, JD, CFP, MBA
Lane, JD, CFP, MBA, JD, CFP, MBA, CRPS
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I have a friend whose husband passed away last year. They

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I have a friend whose husband passed away last year. They have a large amount of money invested and her tax preparer suggested that she file an estate tax return to allow her to use her husband’s exemption so that when she dies her children will not have to pay tax on their whole estate.
What my friend wants to know is can she deduct the amount she paid the accountant? Can she deduct this from her 2013 return that is to be filed next year? I believe the form is called a 706. I believe she paid around $10,000.00
If so, would she deduct is as an investment expense, such as fees she would deduct for a brokerage account. If you need any additional information, just let me know. I would like to know what I can tell my friend to help her out as much as possible.
Thank you.
Monica Appleby
Submitted: 1 year ago.
Category: Finance
Expert:  Lane, JD, CFP, MBA replied 1 year ago.

Lane :

Hi Monica ... Yes she can

Lane :

See this:

Lane :

From there ....





Tax Preparation Fees (Line 22)





You can usually deduct tax preparation fees in the year you pay them. Thus, on your 2012 return, you can deduct fees paid in 2012 for preparing your 2011 return. These fees include the cost of tax preparation software programs and tax publications. They also include any fee you paid for electronic filing of your return.


 


Lane :

And on doing the 706 return... YES, if a timely election is made on the 706, over 10,000,000 of he estate can be excluded (w'ere talking federal estate taxes here now) ... this isunder the rather new "portability rules," where BOTH spouses exemption equivalent can be used ... eliminating the need to do the credit shelter trust you have have heard of

Lane :

questions?

Lane :

I still don't see you coming into the chat .... I can move us to the"Question and Answer" mode ... Maybe that will help

Lane :

But to recap, yes those tax prep fees are deductible ... and doing the 706 form is really a necessity, and the ONLY way to preserve that full estate (up to $10,500,000) tax exemption

Lane :

Let me know if you have ANY questions at all

Lane :

Lane

Expert:  Lane, JD, CFP, MBA replied 1 year ago.

Hi,

... just checking back in, as I ever saw you come back into the chat.

Let me know if you have more questions on this

Lane
Customer: replied 1 year ago.

Thank you for your response, just to clarify even if the form 706 was on the deceased spouse to preserve his exemption the wife can deduct the cost of completing the 706 on her tax return? Thank you for your response

Customer: replied 1 year ago.


Is that the case her, sounds like you are saying this is accepted is that so?

Expert:  Lane, JD, CFP, MBA replied 1 year ago.


Yes, because this is a tax prep fee, she can deduct it.

Doesn't matter that it's a 706 and not a 1040 personal return ... it's still a cost to her, and is still tax preparation ... and it IS deductible

Yes, accepted, and very common.

Lane
Lane, JD, CFP, MBA, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 4509
Experience: Providing Financial, Tax & Business advice since 1986
Lane, JD, CFP, MBA and other Finance Specialists are ready to help you
Expert:  Lane, JD, CFP, MBA replied 1 year ago.

Thanks so much for the rating and bonus!

Let me know if you need further help on this.

Lane

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Lane, JD, CFP, MBA
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